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Home Buyers Guide Nationwide

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     An easy, step-by-step guide to buying your next home
     If you are thinking about moving, this guide is for you! The whole process of buying a new home can be
     daunting; from finding the best mortgage for you and finding your ideal new home, to seeing the sale
     completed and eventually moving in! This guide will take you through the necessary steps to help make
     buying your home, and moving in, a success!


              Read straight through the Guide or jump to a particular
              section of interest as outlined on our contents page.
              We’ve included a user-friendly glossary to help you make
              sense of the jargon! You can find all purple words
              throughout the Guide in the glossary.


                              If you need to sell your current

                       SALE   home. Why not check out our new
                   FOR        Home Selling Guide, which will help
                              steer you through the whole process,
                              giving you handy tips along the way.




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                                                                                                         Home Buyers’ Guide   Home Guides


                                Home Buyers’ Guide
                                Click on a Step to jump straight to that section.
       CONTENTS
                                Step 1: Things to consider before you buy      Step 12: Surveys and insurances
                                Step 2: Low cost ownership options             Step 13: Exchanging contracts and completion
                                Step 3: Mortgage reminders                     Step 14: Getting organised before the move
                                         – How you can pay
                                                                               Step 15: Moving day action plan and checklist
                                         – Types of mortgages available
                                         – Where to look for a mortgage deal   Step 16: After the move
                                Step 4: How much can you afford?               Step 17: Budgeting
                                Step 5: How much can you borrow?               Step 18: Economising and living sustainably
                                Step 6: How to apply for a mortgage            Step 19: Top Tips to help buyers
                                Step 7: Choosing a location for your           Step 20: Frequently Asked Questions
                                        new home                               Appendix
                                Step 8: Finding a property                     a) What does all this jargon mean (glossary)
                                Step 9: Viewing a property                     b) Useful contacts
                                                                               c) Ten point action plan for home buyers
                                Step 10: Making an offer
                                                                               d) Ten point action plan for moving in
Available on                             – (Part 1) England, Wales
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                                           and Northern Ireland                e) Home buyer contact details
Independent of Nationwide
products and services                    – (Part 2) Scotland                   f) Home buyer checklist for those to contact
                                                                               g) List of suggested things to ask an adviser
                                Step 11: Main mortgage application
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                                                                                                                                contents
                                                                                                                        Home Buyers’ Guide     Home Guides




                STEP
                            1   Things to consider before you buy
                                Before deciding your next move you need to carefully consider your personal
                                circumstances and the financial implications involved.
If you’re buying                If you’re buying and selling                            Will you be buying with
and selling                     You have three main options:                            someone else?
                                  Buy and sell at the same time: most people            This is commonly called a joint mortgage and can make
Will you be buying with
                                  see this as being the ideal situation – no renting    the buying process easier, as buying with a partner,
someone else?
                                  or bridging loan needed – but not always easy to      family member or friend can actually ease the financial
Financial considerations          achieve. Can also be very stressful!                  pressure. But remember that relationships can change
Equity                            Sell first: you will be in a stronger negotiating      and circumstances alter so if you are considering one
                                  position when you come to buy, since you will be      of these options, you might want to seek legal advice
                                  chain free and be clearer about what price you can    before deciding which type of ownership is right for
                                  offer. However, you might end up having to rent       you. Your options for ownership are:
                  LE   SOLD       while you look for another place to buy and also          Beneficial Joint Tenants*: this means the
           R   SA                 have to face a double move and maybe storage              property is jointly owned; you don’t own a specific
         FO                       charges. Remember that prices may also go up in           share in the property and if you die the property
                                  the meantime (although they might also go down).          goes to the other owner.
                                  If you really don’t want to rent, then you can make       Tenants in Common*: again this means you
                                  it clear that you will only accept an offer on the        jointly own the property, but you own a specific
                                  condition that you find a suitable place to buy.           share of the value, which you can give away or
                                  This would involve careful negotiation, but you           sell, or leave to someone else if you die. This is
                                  could agree to take your home off the market and          usually the most appropriate option if you are
                                  promise not to sell to anyone else.                       buying with friends.
Available on
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                                  Buy first: this can put you under pressure to sell     However whichever one of these you choose, you
Independent of Nationwide
                                  your home quickly to avoid the expense of having      are both liable for the whole mortgage debt and any
products and services             two homes at once and a bridging loan to pay. In      payments owed. So, if one of you were to abscond the
                                  addition it can also leave you more vulnerable to     remaining one would still have to pay the full mortgage.
Provided by                       gazumping.                                            * The Scottish equivalent is called ‘joint tenants’.

                                                                                                                                      STEP 1: page 1 of 2
                                                                                                                   Home Buyers’ Guide   Home Guides




                STEP
                            1   Things to consider before you buy

                                Financial considerations
                                   Money up front: finding the initial deposit to
                                                                                        Equity
                                                                                        Hopefully the value of your new home will increase
                                   buy a home may be an issue. Although you can         over time, which will result in increased ‘equity’. For
                                   in some circumstances put as little as 5-15% down    example let’s say you have paid £50,000 deposit on
If you’re buying                   as a deposit, currently the average deposit in the   a home valued at £250,000, and you have a mortgage
and selling                        UK for people moving home is approximately 30%       of £200,000. You later have your house revalued and
                                   (and around 20% for first time buyers)*. This may     it is now worth £350,000, your equity in this case
Will you be buying with
                                   not sound like a lot of money when talking in        would be £150,000 (new value of the home minus
someone else?
                                   percentages but look – 30% of a £250,000 home is     original cost of the home + initial deposit = equity).
Financial considerations           £75,000 (20% would be £50,000). Remember, the        This is great news!
                                   larger your deposit, the better the mortgage deal
Equity                                                                                  However, there are no guarantees that property
                                   you can usually get. You may also need to
                                                                                        prices will remain stable or increase after you have
                                   pay legal and valuation fees (see Step 5)
                                                                                        bought your home. Sometimes house prices can fall
                                   On-going costs: remember that as soon as             dramatically. You could be caught in negative equity
                  LE   SOLD        you become the owner of a property it is your        where your home is worth less than you bought it for
           R   SA                  responsibility to keep up the mortgage repayments,   or the amount you borrowed.
         FO                        utility bills, house maintenance, repairs and any
                                   unforeseen expenses or increases, such as any
                                   increase in your mortgage payments. Should you
                                   fall ill or lose your job, and therefore lose your
                                                                                              £50,000
                                   income, could you keep up with the mortgage
                                   repayments and avoid the risk of losing your
                                                                                                                           £250,000
                                   home if you can’t? (There are ways to protect
                                   against this – see Step 12).
Available on
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                                *Council of Mortgage Lenders (August 2011)                        £350,000
Independent of Nationwide                                                                                                      Equity
products and services                                                                                                      £150,000
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                                                                                                                                STEP 1: page 2 of 2
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              STEP
                        2       Low cost ownership options
                                There are a variety of low cost ownership schemes that are available, both Government
                                sponsored and private.
Low cost options                Low cost options:
Have you considered             The variety of low cost ownership schemes vary            Rent to Buy: allows you to rent with a view
                                from time to time, however, and may be restricted         to buying at a future time at an agreed price,
                                opportunities. Many are only available in certain parts   protecting you if property prices rise drastically.
                                of the UK and certain criteria may need to be met for     Usually if you do buy the property, the rent you
                                you to participate. Usually any such scheme will fall     have paid is returned and you can then add this
                                into one of three categories:                             to your deposit.
                                   Shared Ownership: allows you to own a ‘share’
                                   in a property with another party – usually Housing
                                   Associations – and you pay them rent on their
                                   share of the property. You can normally increase
                                                                                                                              RENT
                                   your share in the property over time, this is called                                       NOW!
                                   ‘staircasing’ and can help you eventually own
                                   100% of the property.
                                   Shared Equity: you do not share ownership of
                                   the property but take both a mortgage and an
                                   equity loan to fund the purchase. A deposit is also                        BU
                                   usually required. No interest is charged on the                          LATEY !
                                                                                                                 R
                                   equity loan for the first five years and thereafter a
                                   low rate is usually charged. When you sell, as well
Available on                       as paying back both the mortgage and the loan,
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                                   you need to pay a proportion of the increase in
Independent of Nationwide
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                                   equity (if any).


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                                                                                                                                STEP 2: page 1 of 2
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              STEP
                        2       Low cost ownership options

                                Have you considered:
                                  Repossessed property: this can be an ideal
                                  way to pick up a property at less than the actual
                                  value. Although many mortgage lenders now
Low cost options                  prefer not to declare how many properties they
Have you considered               have repossessed, you can still enquire and find
                                  out where there may be deals. However, these
                                  properties could have been vacant for a while
                                  and may need work or repairs to be done.
                                  Property auctions: thousands of homes in prime
                                  areas are available at all times in UK property
                                  auctions waiting to be sold at prices below market
                                  value. Although you may get a great deal, it can
                                  be risky since you are usually unable to get the
                                                                                         FOR AUCTION
                                  property surveyed before bidding. In most cases
                                  buyers will also need to have the cash ready for the
                                  sale on the day of the auction.


                                   Summary
                                   Do your research… just because house
                                   prices seem high, it doesn’t necessarily mean
                                   that you can’t afford to buy a property. You
                                   just need to have a really good look around
                                   and do your research. Make sure you get
Available on
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                                                                                                        STEP 2: page 2 of 2
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              STEP
                            3   Mortgage reminders
                                It’s important to keep in mind exactly what a mortgage is and what it’s made up of
                                before deciding how you want to pay back.
How you can pay                 How you can pay
Types of mortgages available    Remember a mortgage actually consists of two parts:           Repayment (Capital and Interest):
                                   – the ‘capital’: the initial loan, or amount borrowed      this means each month you pay off part of the
Special features                                                                              ‘capital’ (amount borrowed) as well as the interest.
                                   – the ‘interest’: the amount charged on top
                                                                                              This usually means that everything (capital and
Where to look for a                  by the lender until the amount is paid back.
                                                                                              interest) will have been fully paid off by the end
mortgage deal
                                   Interest only: this means each month you only              of the agreed term.
If you already own your            pay the interest on what you have borrowed.
                                                                                              Part and part mortgage: this means you chose
current home                       Whilst this usually means lower monthly
                                                                                              to split your loan so that you repay part of it on an
                                   repayments, remember that at the end of the
                                                                                              interest-only basis and part of it on a repayment
                                   agreed ‘mortgage term’ you will still owe the
                                                                                              (capital and interest) basis each month.
                                   whole amount borrowed and you have to find a
                                   way to pay that back. You will need to be paying        Remember, although the ‘interest only’ may cost you
                                   into a separate investment, such as an endowment,       less each month than the ‘repayment’ option, you
                                   pension or ISA, and be confident that you have in        need to include in your budget the additional monthly
                                   place the means to repay the full loan amount at        cost of the investment you will need to pay the
                                   the end of the term.                                    ‘capital’ off at the end of the term.
                                   Many lenders now restrict the size of the loan you
                                   can have on an interest only mortgage to a certain
                                                                                                    INTERESTO
                                                                                                             NLY      REPAY MENT
                                   percentage of the property value (e.g. a maximum
Available on
                                   loan of 75% of the property value).
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                                                                                                                                    STEP 3: page 1 of 5
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              STEP
                            3   Mortgage reminders

                                Types of mortgages available
                                There’s a huge choice of mortgages out there, so don’t       Tracker mortgages: these are like variable rate
                                be overwhelmed! You need to narrow your search               mortgages, where payments can go up or down,
                                down to the type of mortgage that suits you best and         but tracker mortgages are linked to the Bank of
How you can pay                 then you can compare the range of deals and features         England base rate, and ‘track’ this rate by a certain
Types of mortgages available    within that type.                                            percent. This means that if the Bank of England
                                                                                             base rate goes up or down, then so do your
Special features                Here are the main types:
                                                                                             payments.
                                   Fixed Rate mortgages: this means that you
Where to look for a                agree a rate of interest that stays fixed until a set      Capped Rate mortgages: these guarantee a
mortgage deal                      date (for example 2, 5, 10 years or longer) allowing      maximum amount that you would have to pay.
                                   monthly payments to remain the same throughout.           Your payments may go up or down under that
If you already own your
                                   This is a great way to be able to budget as you will      amount, as interest rates increase or decrease,
current home
                                   always know how much your monthly payment                 but you wouldn’t have to pay more than a certain
                                   will be. You could lose out if general interest rates     amount even if the interest rates rise higher.
                                   drop but you may be better off if they increase! At       Collared mortgages: usually found in
                                   the end of the initial or special deal period, the rate   combination with a capped or tracker mortgage,
                                   usually reverts to the lender’s Standard Variable         collared mortgages have a set lower level (the
                                   Rate (SVR).                                               ‘collar’), so your payments would never fall lower
                                   Variable Rate mortgages: these mortgage                   than that level.
                                   payments vary and can move up or down                     Cashback mortgages: these give an extra lump
                                   dependent on the movement of the interest rates           sum of cash at the beginning of your mortgage for
                                   of the mortgage lender. You may start off with a          you to spend on anything you like (sometimes your
                                   low rate but are not guaranteed this will not go          home). They are sometimes linked with a variable
                                   up later on.                                              rate mortgage.
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                                                                                                                                   STEP 3: page 2 of 5
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              STEP
                            3   Mortgage reminders

                                Types of mortgages available (cont)
                                   Offset mortgages: these combine a traditional
                                                                                             Fee-free: will the lender pay for or not charge
                                                                                             certain fees?
                                   mortgage with any deposit accounts you have,              Flexibility: will the mortgage adapt to your
                                   such as savings and/or a current account. With an         changing circumstances? (e.g. can you make
How you can pay                    offset mortgage, the balance of your savings or           overpayments or underpayments).
Types of mortgages available       current account is subtracted from your mortgage          Portability: can you take your mortgage deal with
                                   debt, decreasing the net balance on your mortgage         you when you move house?
Special features                   and reducing the amount of interest you pay.
                                   Usually, your money remains in separate accounts.         Payment holiday: do you have the ability to
Where to look for a                                                                          take a mortgage payment break?
                                   If you remove money from your savings/current
mortgage deal
                                   account, this increases the net balance of your           Repayment term: can you alter from repayment
If you already own your            mortgage account and the amount of interest               to interest only or vice versa?
current home                       you pay.
                                                                                             Borrow more: are you able to easily increase your
                                   Current Account mortgages: similar to an                  mortgage amount?
                                   offset mortgage but these combine your current
                                                                                             Longer terms: can the loan term stretch to 40
                                   account and your mortgage into one. You still make
                                                                                             or even 45 years?
                                   a monthly mortgage payment, but any savings or
                                   money paid in acts as an overpayment so you may           Over payments: are you able to make additional
                                   pay off your mortgage sooner.                             payments to reduce mortgage debt?

                                Special features                                             No early repayment charges: can you repay the
                                                                                             mortgage or change deals within the special deal
                                Regardless of the mortgage type you choose there             period without charge?
                                are many additional features that lenders may offer.
                                It may be important to you that one or more of these      A useful way to compare mortgages is to get a Key
Available on                    features are offered as part of your deal, so give them   Facts Illustration (KFI) for any mortgages you are
www.NationwideEducation.co.uk   some thought and choose your deal accordingly!            interested in. This gives you all the information you
Independent of Nationwide                                                                 need to know about the mortgage product, and is
products and services           Look out for these features:                              standardised so that you can compare mortgages
                                   Fees: can you add these onto your mortgage?            from different lenders on a ‘like-for-like’ basis.
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                                                                                                                                   STEP 3: page 3 of 5
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              STEP
                            3   Mortgage reminders

                                Where to look for a mortgage deal
                                The main places that offer mortgages are:                  Think of the time you can save accessing these details
                                   Building societies and banks                            all in the one place. They also often allow you to
                                   Insurance companies                                     click through to the lenders website and begin the
How you can pay                                                                            application process there and then.
                                   Brokers
Types of mortgages available       House building companies                                Online, by phone or in person
Special features                                                                           Alternatively you can visit your preferred lenders’
                                   Specialist mortgage companies or finance houses
                                                                                           websites, call their mortgage advisers or if they have a
Where to look for a                                                                        local branch, pop in and speak with them.
                                Online comparisons tools
mortgage deal                   Online comparison tools have become very popular           Remember to compare ‘like-for-like’
If you already own your         and are often easy to use. By simply inputting a             Repayment (Capital & Interest) or Interest only
current home                    few details about your personal circumstances and            The type of loan
                                preferences, you will be provided with a list of             The term of the loan
                                possible mortgage deals to consider. They usually
                                                                                             The term of the special rate
                                allow you to compare by various features including:
                                type, features, maximum loan-to-value, overall cost          Maximum loan-to-value ratio
                                for comparison, standard variable rates and, very            Fees and charges
                                importantly, interest rates.                                 Flexibility
                                                                                             How interest is calculated
                                They also give you the ‘overall cost for comparison’
                                (also known as the ‘annual percentage rate’ or ‘APR’)        Additional features or conditions
                                which helps you compare like-for-like, as it shows
                                the total yearly cost of a mortgage as a percentage
                                of the loan. It includes not only the interest rate paid                 £ MONEY£
Available on                    but fees and other charges too. Remember though
www.NationwideEducation.co.uk   that it assumes you will be keeping the mortgage for
                                                                                                               MR. MANAGER
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                                sometime in the future.

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                                                                                                                                         STEP 4: page 4 of 5
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              STEP
                            3   Mortgage reminders

                                If you already own your current
                                home
                                Before you start shopping around for a new mortgage       You should also ask for a ‘redemption quote’, which
                                deal for a new property, speak to your current            shows exactly what you currently owe and will
How you can pay
                                lender to see if the mortgage you already have is         help you decide how much you want to borrow.
Types of mortgages available    ‘portable’. This simply means you can transfer your
                                                                                          Remember, that besides the cost issues, consider
                                existing mortgage to a new property. This might be
Special features                                                                          how happy you are with your current lender, what
                                an attractive option if you feel you have a really good
                                                                                          their reputation in the market place is like and how
Where to look for a             deal currently, or want to avoid any early repayment
                                                                                          they value you as a customer.
mortgage deal                   charge.
                                                                                          Professional advice
If you already own your         Lenders may charge you an ‘early repayment charge’
                                                                                          If you feel a bit overwhelmed, there are many
current home                    (ERCs; sometimes also known as an ‘early redemption
                                                                                          professionals to help including: mortgage advisers,
                                charge’) if you repay your mortgage in the early
                                                                                          brokers, lenders and Independent Financial Advisers
                                years or during the term of your special deal period.
                                                                                          (IFAs). Do check that whoever you chose is regulated
                                An ERC can be calculated in different ways, typically
                                                                                          by the Financial Services Authority (FSA), meaning they
                                several months’ interest or a percentage of your loan;
                                                                                          are obliged to meet certain standards and treat you
                                although the charges usually reduce the closer you get
                                                                                          fairly. Be sure to ask about their level of independence,
                                to the end of your mortgage deal. Either way, it could
                                                                                          the extent of the service they will provide and if and
                                cost you several thousand pounds, so make sure you
                                                                                          what they will be charging you at the outset.
                                check exactly what it will cost. Remember to watch out
                                for other possible charges such as exit fees.             (See Appendix g for suggestion of things to ask
                                                                                          an adviser.)
                                It might be simpler and cheaper to switch to one
                                of your current lender’s products than go elsewhere.
Available on                    So, find out what deals they have on offer and get
www.NationwideEducation.co.uk   details of each to compare against what is available
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                                                                                                                                   STEP 5: page 5 of 5
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              STEP
                            4   How much can you afford?
                                Whatever stage of life you are at, your day-to-day living expenses are important and
                                these change depending on your individual circumstances.
Budgeting                       Budgeting                                                      Do the sums!
Do the sums!                    To get a better idea of how the cost of any new                You should always take the time to calculate as far
                                mortgage will fit into your overall budget, look at all         as possible what the real cost of the various options
Interest rates and monthly      your finances. Work out your income (salary, benefits            would be. Work out not only what you think your new
payments                        and any gifts) and your personal outgoings (food,              monthly payments would be, but also what the overall
                                drink, travel, clothes, toiletries, etc.), as well as trying   cost over the time you plan to keep the mortgage
Over how long?
                                to estimate your new home costs in addition to the             would be, whether this is for its whole term or until
                                mortgage payments (including council tax, utilities,           you remortgage again when the special rate ends.
                                insurances, telephone, TV, etc.).                              That way you will be comparing like with like.
                                Remember, if you are buying a flat you may be
                                purchasing a lease, in which case you will have to pay
                                service charges and ground rent. Use the budget sheet
                                in Step 17 to aid you.                                                           SALARY
                                                                                                                         MORTGAGE


                                                                     1 2 3 X
                                                                                       ?                                        TRAVEL

                                                                    4 5 6                                              FOOD AND DRINK
                                                                           -
                                                                   7 8 9
Available on
                                                                          +
                                                                  0 . % =                                                     CLOTHES ETC
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                                                                                                                OTHER BILLS
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                                                                                                                                       STEP 4: page 1 of 2
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              STEP
                            4   How much can you afford?

                                Interest rates and monthly payments
                                The table below gives you an idea of what your
                                                                                         So for example, if you were borrowing £150,000
                                                                                         over 25 years at an interest rate of 4.5%, the
                                                                                         monthly cost would be £562.50 interest only or
                                monthly payments might be. It gives a range of
                                                                                         £834 repayment.
                                interest rates and what you could expect to pay on
Budgeting                       an ‘interest only’, or a ‘repayment’ mortgage for each   Over how long?
Do the sums!                    £1,000 borrowed…it’s only a guide though and
                                is based on a 25 year mortgage term agreement.           When deciding the length of term on your new
Interest rates and monthly      Remember that interest rates can change, so keep that    mortgage, beware of false economy! Whilst it’s
payments                        in mind when budgeting or choosing which mortgage        tempting to add years for the benefit of reduced
                                is best for you.                                         payments, calculate how much extra you would repay
Over how long?                                                                           in total over the term and you may be shocked!
                                As an example, take the amount you want to borrow
                                and divide by 1,000, then multiply that amount by        For example: with a £100,000 mortgage at an interest
                                the rate of interest.                                    rate of 5%, the difference between a 25 year term and
                                                                                         a 30 year term is £48 per month. But you would pay
                                                                                         £17,760 more as a result.
                                 Payment Per Month Per £1,000 Borrowed
                                 (based on a 25 year mortgage term)                      Click the link below to view
                                   The interest       Interest only       Repayment
                                       rate            mortgage*           Mortgage        Nationwide’s Payment Calculator
                                      2.5 %              £ 2.08             £ 4.49         You can use this to compare monthly payments
                                      3.0 %              £ 2.50             £ 4.74         at different interest rates over different terms.
                                      3.5 %              £ 2.92             £ 5.01
                                      4.0 %              £ 3.33             £ 5.28
                                      4.5 %              £ 3.75             £ 5.56
                                      5.0 %              £ 4.17             £ 5.85
                                      5.5 %              £ 4.58             £ 6.14
Available on                          6.0 %              £ 5.00             £ 6.44
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                                      6.5 %              £ 5.42             £ 6.75
Independent of Nationwide             7.0 %              £ 5.83             £ 7.07
products and services
                                * Also budget for the additional monthly cost of the
                                investment you will need in order to pay the ‘capital’
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                                off at the end of the term.
                                                                                                                                     STEP 4: page 2 of 2
                                                                                                                        Home Buyers’ Guide   Home Guides




              STEP
                            5   How much can you borrow?
                                Various factors need to be taken into consideration for lenders to decide how much
                                they will lend you.
How much can you borrow?        How much can you borrow?                                 Your credit rating
Your credit rating              How much you can borrow depends on your personal         Lenders will want to make sure that your credit rating
                                circumstances and what the lender is willing to lend     is adequate. They use the information you give in
What deposit do                 you. While this decision is mostly based on your         your application, but they also rely heavily on data
you have?                       income and current out-goings (or a joint income         supplied by credit reference agencies. Your ‘credit
                                and out-goings if you are buying with someone else)      worthiness’ is based on your history of borrowing
What do lenders look at?
                                other factors such as your credit rating, your loan-     and repayment; it also takes into account any other
One-off costs                   to-value ratio and the current value of your property    financial assets or liabilities you might have. From all
                                will also be considered. The lender will carry out an    this information, a ‘credit score’ is generated. If you
                                assessment to decide how you ‘score’ financially.         have a poor rating you will be considered a greater
                                Individual lenders are obliged to lend responsibly and   risk and may be offered a less favourable rate, or even
                                use their own criteria when deciding whether or not      have your application declined.
                                to lend you money.
                                                                                          Improve your credit rating
                                 TIP                                                      There are some ways that you can improve your
                                 The Loan-to-Value ratio is the comparison                credit rating, such as registering to vote. Look in
                                 between the amount you want to borrow                    Appendix b – Useful Contacts for websites
                                 and the value of your home expressed as                  where you can find out how you can further
                                 a percentage. It tells the lender how much               enhance your credit rating.
                                 equity you have in your home. The lower
                                 the percentage, the better the deals you                Click the link below to view
Available on
www.NationwideEducation.co.uk    can usually get.                                          How much can you borrow?
Independent of Nationwide                                                                  Online tool to see how much Nationwide could
products and services
                                                                                           lend you.

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                                                                                                                                     STEP 5: page 1 of 3
                                                                                                                                    Home Buyers’ Guide     Home Guides




              STEP
                            5   How much can you borrow?

                                What deposit do you have?
                                These days, you usually need to put a substantial
                                                                                            Have you ever missed a mortgage payment
                                                                                            in the past?
                                deposit down on any home purchase. As you are               Do you have any County Court Judgements (CCJs)
                                moving home this is likely to come from the equity          against your name?
How much can you borrow?        in your current home. Most lenders would like you to
Your credit rating              put down at least a 15% deposit of the total cost of
                                the house. There are however a few lenders offering
                                                                                                                                 NY
What deposit do                 mortgages with a 5% or 10% deposit, but remember                                            COMPA
                                                                                                                                                ONTH
you have?                       that generally the lower the deposit you have the                                                         WEEK/M
                                                                                             NAME                                             04
                                higher the interest rate you pay.                                                             DATE 2011
                                                                                                                        E
What do lenders look at?                                                                                       N.I. COD       27 08          ER
                                                                                              TAX COD
                                                                                                      E            A                  E NUMB
                                                                                                                                 PLOYE002058
                                                                                                                               EM 00
One-off costs                   What do lenders look at?                                          747L
                                                                                                                  BER
                                                                                                                                  0
                                                                                                         N.I. NU3M56A
                                It is all very well deciding what you want, but there are                 JC12 4
                                lots of things that lenders look for too. Each lender has
                                its own borrowing criteria that you will need to satisfy.                      1
                                                                                                             ARD234 5
                                                                                                    CRE DIT C MR BROW678 9123 4
                                                                                                               5679 91N        48
                                                                                                                 8REDI2 CARREDI 9
                                   Do you earn enough to borrow the amount                                         8
                                                                                                            45 67C T D T C
                                   you want?                                                                              C
                                                                                                     3                 ARD
                                                                                                5 2
                                                                                              34R 6ROWN
                                   Are you self-employed or new in a job?                      M B 8912 5678 9123 4567
                                   How much debt do you have?                                   567 12R34 OWN
                                                                                                        M BR
                                                                                                        1234567
                                   If you want an ‘interest only’ mortgage...
                                   can you show evidence of the investments
                                   you have in place?
                                   Most lenders will only allow you to borrow a
Available on                       certain amount of the property’s current value.
www.NationwideEducation.co.uk
                                   Are you looking to borrow too much?
Independent of Nationwide
                                   How good is your credit rating?
                                                                                                                                    730
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                                                                                                                                                   STEP 5: page 2 of 3
                                                                                                                          Home Buyers’ Guide   Home Guides




              STEP
                            5   How much can you borrow?

                                One-off costs
                                Don’t forget there are a number of other                      Survey: cost depends on how detailed you want,
                                one-off costs that you will have to budget for.               or need, the Surveyor’s Report to be – again
                                These amounts vary depending on what you choose,              always ask for a quote (see Step 11).
How much can you borrow?        but do not underestimate them as they can add up!
                                                                                              Stamp Duty: this is a tax from the Government
Your credit rating                 Estate agents’ fees: this is usually paid by               on houses worth over £125,000 and can be
                                   the seller of the property, but you can appoint            anything from 1% to 5%. See the HMRC website
What deposit do
                                   one to look for a property for you, in which case          for more details:
you have?                          you would need to negotiate an amount.                     www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm
What do lenders look at?
                                   Legal/solicitors’ fees: a solicitor is needed to           Land Registry Fees: similar to Stamp Duty,
One-off costs                      assist in the legal aspects of moving home, such           it varies depending on the value of the property.
                                   as transferring the legal title of a property from
                                   one person to another (known as conveyancing).             Mortgage Booking/Arrangement Fees:
                                   This varies from solicitor to solicitor and place to       this is a charge you pay the lender for reserving
                                   place but allow a minimum of £400 and always               your mortgage.
                                   ask for a quote upfront.                                   Product/Reservation Fee: payable to your lender
                                   Searches: these are carried out by the solicitor and       for some deals. Often a non-product fee version is
                                   are usually included in their charges. It’s important      also available at a higher rate of interest.
                                   though to make sure everything about the property       …and don’t forget your removal costs!
                                   you are buying is legal and straightforward and
                                   there are no hidden rights of way or clauses.
                                                                                           Click the link below to view
                                   Valuation costs: this is a charge by the lender to
                                   carry out an inspection on the property to make           Nationwide’s cost of moving calculator
Available on                       sure it’s worth what they are lending you.                Get an idea of how much buying (and selling)
www.NationwideEducation.co.uk
                                                                                             a home might cost you.
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                                                                                                                                       STEP 5: page 3 of 3
                                                                                                                                     Home Buyers’ Guide               Home Guides




              STEP
                            6   How to apply for a mortgage
                                So how do you actually apply for a mortgage? This Step explains everything you
                                need to know.
Key Facts Illustrations (KFI)   Key Facts Illustration (KFI)                               The information required
Agreement in Principle (AIP)    The first step is get a Key Facts Illustration (KFI) for    This includes:
                                any mortgage you are interested in. This gives you all        your employment details
The information required        the information you need to know about the mortgage           your income and outgoings
                                product, and is standardised so that you can compare
                                                                                              details of your current mortgage (if applicable)
                                mortgages from different lenders on a ‘like-for-like’
                                basis. It will detail the monthly payments, interest          in some cases the house you are interested in and
                                rates, fees or charges and total amount payable over          your solicitor’s details, though usually you can
                                the term. You can get a KFI for as many mortgages as          get an Agreement in Principle before you find a
                                you like before choosing the one that suits you.              property.

                                Agreement in Principle (AIP)
                                You will also need to get an Agreement in Principle
                                (AIP) (sometimes known as a ‘lending decision’ or
                                ‘decision in principle’) from your chosen lender, (this
                                                                                                                            MENT
                                can be done through an independent adviser) which
                                means they are prepared to lend you the mortgage
                                                                                                  BANK STATE
                                                                                                                                      MONEY     MONEY BALANCE
                                you have asked for, based on information about things                                                  IN       OUT
                                                                                                                                 N
                                                                                                                      DESCRIPTIO      1897.00
                                                                                                                                                       2056.34
                                like your income and outgoings (though be aware this                 DATE                                        40.00
                                                                                                      28/7/11                                     970.00
                                is not a guarantee). Importantly, this can also help                  1/8/11                                       52.00
                                                                                                       1/8/11
                                you to make an offer on a property when you find one                     3/8/11
                                                                                                                                                    25.00
Available on                                                                                                                                        97.81
www.NationwideEducation.co.uk   you want as it shows the seller that you can borrow                      7/8/11                                      50.00
                                                                                                         7/8/11                                       30.00
Independent of Nationwide       enough (in principle) to afford the property. You can                     10/8/11                                      15.00
                                                                                                           10/8/11
products and services           generally get an AIP from a bank or building society, in                    10/8/11
                                the branch, by phone or online.
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                                                                                                                                                               STEP 6: page 1 of 1
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              STEP
                            7   Choosing a location for your new home
                                This has to be a high priority! Estate agents say ‘the three most important factors in
                                determining the desirability of a property are location, location, location’.
Tips and tricks                 Tips and tricks                                       Other suggested things to think about:
                                Don’t make the mistake of picking the right house        Is it close to work?
Help with your research!
                                but in the wrong location! Perhaps you feel you can      How far would you be from family and friends?
                                get more for your money in a less desirable area,        Does it have easy access to main roads?
                                but be wary as you can always make changes to a          What is the public transport like?
                                property, but you cannot alter its location.             What are the shops, restaurants, cafes and
                                So before you start viewing properties in any new        bars like?
                                area you are considering, do some research. You          What about social places like cinemas,
                                need to be sure the area suits your lifestyle.           clubs, leisure centres, etc.?
                                Take a walk around the neighbourhood at different        Do the local schools and nurseries have
                                times of different days, do you feel comfortable?        a good reputation?
                                Does it feel friendly and safe? Can you imagine          What is the level of crime in the area?
                                yourself living there?                                   Are the streets well lit?
                                                                                         Are there any green spaces?
                                                                                         What about healthcare, where is the
                                 Tip                                                     nearest hospital, health centre and doctors?
                                 When you come to view properties in the area
                                                                                         If you have a chosen place of worship, how far
                                 you can double check these points by using the
                                                                                         away is it?
                                 ‘Finding a Property Checklist’ in Step 8 and then
                                                                                         What is parking like?
                                 the ‘Viewing Checklist’ in Step 9.
Available on
www.NationwideEducation.co.uk
                                                                                         Is it family friendly – play parks, open
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                                                                                         spaces, traffic calming, cycle paths, groups
products and services                                                                    and activities?
                                                                                         Disabled access and facilities?
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                                                                                                                             STEP 7: page 1 of 2
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              STEP
                            7   Choosing a location for your new home

                                Help with your research!
                                There is so much information that is just a click away!      Local NHS services
                                                                                             www.nhs.uk/servicedirectories
                                Check out the following:
                                   Interesting local information from the                    Environmental, flood and pollution risks
Tips and tricks
                                   Office for National Statistics on a variety                from the Environmental Agency
Help with your research!           of topics                                                 www.environment-agency.gov.uk/maps
                                   www.neighbourhood.statistics.gov.uk                       School reports
                                   Council Tax bandings for England and Wales                www.ofsted.gov.uk
                                   www.voa.gov.uk                                            Moblie phone masts
                                   Council Tax bandings for Scotland                         www.sitefinder.ofcom.org.uk
                                   www.saa.gov.uk.
                                                                                             Air quality
                                   Public transport links                                    www.uk-air.defra.gov.uk
                                   www.traveline.info
                                                                                             Any plans for future road developments
                                   Crime levels                                              via the Highways Agency
                                   www.Police.uk                                             www.highways.gov.uk/roads
                                                                                             Local house prices & trends, schools, crime
                                                                                             rates, local businesses and more
                                                                                             www.upmystreet.com

                                            WWW.                                             www.zoopla.co.uk
                                                                                             The local Council’s website to find local
                                                                                             parks and green spaces... and so much more.
Available on
www.NationwideEducation.co.uk                                                             Finally speak to people in the street close to any
Independent of Nationwide                                                                 house or flat you are interested in... but not right
products and services                                                                     next door... and ask for their honest opinions of the
                                                                                          best and worst points of the area.
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                                                                                                                                    STEP 7 page 2 of 2
                                                                                                         Home Buyers’ Guide   Home Guides




              STEP
                        8       Finding a property
                                Once you have an idea of what you can afford, or what a mortgage lender can offer
                                and the area where you want to live, you need to search for and look at properties –
                                but where should you start?
Where to start
Remember to check if it is      Where to start                               Remember to check if it is freehold
freehold or leasehold!          Here are a few examples:                     or leasehold!
                                  Local estate agents in the area you like   Freehold
‘Would like’ and ‘need’ list
                                   Estate agents and other reputable sites   Freehold means that the sale includes the property
                                   on the internet                           and the land on which the property is built, and that
                                                                             there will be no ground rent or service charge due.
                                   Local newspapers property pages           You have complete ownership of both the land and
                                   ‘FOR SALE’ boards in chosen location      property for an unlimited time.
                                   House building companies building in      Leasehold
                                   the area                                  Leasehold means that the sale does not include the
                                                                             land on which the property is built – instead you pay
                                   At an auction
                                                                             ground rent to the owner of the land – the freeholder.
                                   Online property sites such as:            You only have the right to occupy the property for
                                   www.rightmove.co.uk                       the length of time left on the lease. You might also
                                   www.primelocation.com                     have to pay a service charge too – this is usual with
                                   www.findaproperty.com                      flats and covers maintenance and repairs to the whole
                                   www.tepilo.com                            building and upkeep and cleaning of communal
                                                                             parts of the grounds or surroundings.
                                   www.zoopla.co.uk
Available on                                                                 In Scotland, very few houses are leasehold, the vast
www.NationwideEducation.co.uk
                                                                             majority are freehold.
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                                                                                                                      STEP 8: page 1 of 3
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              STEP
                        8       Finding a property

                                ‘Would like’ and ‘need’ list
                                Use this check list to help you stay focused. If you are viewing the Flash version of this guide, select ‘PDF’ in the
                                bottom left corner to open the checklist.

Where to start                                                                                                                                                       Home Buyers’ Guide   Home Guides



Remember to check if it is               STEP
                                                 8
freehold or leasehold!                                     Finding a property – ‘would like’ and ‘need’ list

‘Would like’ and ‘need’ list                                                                    Like           Need                                                                Like          Need
                                  Type of place                                                                               The outside
                                  Flat                                                                                        Garden
                                  Bungalow                                                                                    Patio
                                  Semi-detached                                                                               Privacy from neighbours
                                  Terraced                                                                                    Garage
                                  Detached                                                                                    Shed/outbuildings
                                  The inside                                                                                  Off road parking
                                  Number of bedrooms                                                                          Space for pets
                                  Number of living rooms                                                                      Room to build/extend
                                  Number of bathrooms/toilets                                                                 Location
                                  Separate kitchen                                                                            Near to work
                                  Separate dining area                                                                        Near to family and friends
                                  Study/playroom                                                                              Near to main roads
                                  Central heating                                                                             Easy access to public transport
                                  Double glazing                                                                              Access to shops
                                  Good décor                                                                                  Access to social places
                                                                                                                              Near to schools and nurseries
                                                                                                                              Near to doctors surgeries /hospitals
                                                                                                                              Near to place of worship
                                                                                                                              Good parking
                                                                                                                              Family friendly
                                                                                                                              Disabled access
                                  Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                            STEP 8: page 3 of 3

Available on
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                                                                                                                                                                                                                 STEP 8: page 2 of 3
                                                                                                                                   Home Buyers’ Guide   Home Guides



       STEP
               8
                         Finding a property – ‘would like’ and ‘need’ list

                                                              Like           Need                                                             Like          Need
Type of place                                                                               The outside
Flat                                                                                        Garden
Bungalow                                                                                    Patio
Semi-detached                                                                               Privacy from neighbours
Terraced                                                                                    Garage
Detached                                                                                    Shed/outbuildings
The inside                                                                                  Off road parking
Number of bedrooms                                                                          Space for pets
Number of living rooms                                                                      Room to build/extend
Number of bathrooms/toilets                                                                 Location
Separate kitchen                                                                            Near to work
Separate dining area                                                                        Near to family and friends
Study/playroom                                                                              Near to main roads
Central heating                                                                             Easy access to public transport
Double glazing                                                                              Access to shops
Good décor                                                                                  Access to social places
                                                                                            Near to schools and nurseries
                                                                                            Near to doctors surgeries /hospitals
                                                                                            Near to place of worship
                                                                                            Good parking
                                                                                            Family friendly
                                                                                            Disabled access
Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                            STEP 8: page 3 of 3
                                                                                                                    Home Buyers’ Guide   Home Guides




              STEP
                            9   Viewing a property
                                There are many things to consider when you are viewing properties. This Step covers
                                tips and tricks and suggested questions you should ask the seller!
Stay focused on your needs      Stay focused on your needs
Then when you get there         Don’t let your heart rule your head and don’t lose sight
                                of why you are moving! Whether it’s for work, because
Ask questions!                  you’re getting married or moving in together, to get a
Ask to see the EPC              bigger place, to start a family, to down-size or to retire,
                                stay focused on your needs!                                                         MY NEEDS!
                                Be realistic about how many homes you can view in a
                                certain time period, so be selective about which ones
                                you view. Allow yourself up to 30 minutes to look
                                around the property and also plenty of travelling time
                                between properties. When you speak to the seller or
                                their estate agent, use the time to get a head start and
                                ask some useful questions such as how long the house
                                has been for sale and how much interest has been
                                shown. Try to find out if they are looking for a quick
                                sale, have they already found somewhere to move to?
                                What is the reason that they are moving?

                                                                                                         FOR SALE
                                                                                              FOR SALE


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                                                                                                                                 STEP 9: page 1 of 7
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              STEP
                            9   Viewing a property

                                Then when you get there
                                Here are some viewing tips                           Take along the Viewing Checklist. It will be
                                  Try to imagine living there and how suitable       a great help.
                                  it would be for you and your lifestyle!
Stay focused on your needs        Consider taking a camera and asking if you
Then when you get there           can take photos to remind yourself later!
Ask questions!                    Remember that the seller or their agent do not
                                  need to tell you about any problems the property
Ask to see the EPC                might have, so be a bit of a detective. Look for
                                  potential problem areas and be alert for
                                  ‘cover-ups’.
                                  Try and take someone with you who might
                                  notice things you don’t.
                                  Don’t disregard a home just because of
                                  decoration – this can always be changed.
                                  Try and visit the place at different times
                                  of the day.
                                  Double check what fixtures and fittings are
                                  included.
                                  Don’t be rushed or too embarrassed to
                                  ask to look around some more.
                                  Give careful consideration to the outside
                                  of the property too.
Available on
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products and services



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                                                                                                                            STEP 9: page 2 of 7
                                                                                                                  Home Buyers’ Guide        Home Guides




              STEP
                            9   Viewing a property

                                Ask questions!
                                While you are there, ask the owners or the
                                                                                    Ask to see the EPC
                                                                                    All sellers are required to provide an Energy
                                estate agent any questions you have, such as:       Performance Certificate (EPC) which shows how
                                   What are the neighbours like?                    much energy a building uses with an A to G rating
Stay focused on your needs                                                          (A being the most efficient and G the least).
                                   Does the area feel safe and secure?
Then when you get there                                                             It can help home owners reduce their energy bills
                                   Is the area quiet?                               and live more sustainably by making their home
Ask questions!                     What are the traffic levels?                      more energy efficient.
Ask to see the EPC                 Is parking a problem?                            (In Scotland you will want to have a good look
                                   Which direction does the house or garden face?   at the Home Report pack – see Step 10 part 2)
                                   Cost of heating the property?
                                   Condition of property
                                   – structural problems
                                   – wiring and electrical                            ENERGY EFFICIENCY RATING
                                   – boiler and plumbing                                                                  CURRENT POTENTIAL
                                   – woodwork and windows
                                                                                              A
                                   – damp-proofing
                                   – insulation                                                   B
                                   – gas certificate, if applicable                                    C                                73
                                   What are transport links and public transport                          D
                                   like locally?
                                                                                                              E
                                   What is the local catchment area for schools                                             37
                                   and what are the schools like?                                                 F
Available on
www.NationwideEducation.co.uk      How much is Council Tax, gas, electricity,                                         G
Independent of Nationwide          water, etc?
products and services



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                                                                                                                                 STEP 9: page 3 of 7
                                                                                                                                     Home Buyers’ Guide   Home Guides



       STEP
                9
                         Viewing checklist

Address                                                                                                                            Asking Price

Contact Details Seller:                                                                            Estate Agent:

Viewings              First viewing (Date & Time):                                                 Second viewing (Date & Time):


Location checklist                           Yes       No           Questions to ask seller or agent when booking viewing
Near to work                                                        How long the house has
Near to family and friends                                          been for sale?
Near to main roads
Easy access to public transport                                     How much interest has
                                                                    been shown?
Access to shops
Access to social places                                             Are they looking for a
Near to schools and nurseries                                       quick sale?
Near to doctors surgeries /hospitals
                                                                    Have they already
Near to place of worship
                                                                    somewhere to move to?
Good parking
Family friendly                                                     What is the reason that
Disabled access                                                     they are moving?




Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                              STEP 9: page 4 of 7
                                                                                                                               Home Buyers’ Guide   Home Guides



       STEP
                9
                         Viewing checklist
Mark out of 5 - circle your choice      1 Bad           2 Worrying          3 Average            4 Good          5 Brilliant
 External                                                                  Comments
 Access                                       1     2     3     4     5
 Parking                                      1     2     3     4     5
 Garage                                       1     2     3     4     5
 Garden                                       1     2     3     4     5
 Privacy                                      1     2     3     4     5
 Brick/Stone                                  1     2     3     4     5
 Roof                                         1     2     3     4     5
 Chimney                                      1     2     3     4     5
 Drains                                       1     2     3     4     5
 Guttering                                    1     2     3     4     5
 Windows                                      1     2     3     4     5
 Doors                                        1     2     3     4     5
 Refuse & Recycling Bin location              1     2     3     4     5
 Additional for flats or apartments
 Shared Services                              1     2     3     4     5
 Door entry system                            1     2     3     4     5
 Communal Areas                               1     2     3     4     5
 Lighting                                     1     2     3     4     5
 Cleanliness                                  1     2     3     4     5
 Additional Notes




Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                        STEP 9: page 5 of 7
                                                                                                                               Home Buyers’ Guide   Home Guides



        STEP
                9
                         Viewing checklist
Mark out of 5 - circle your choice      1 Bad           2 Worrying          3 Average            4 Good          5 Brilliant
 Internal                                                                  Comments
 Security                                     1     2     3     4     5
 Safety – Smoke/Carbon Monoxide Alarm         1     2     3     4     5
 Loft Access                                  1     2     3     4     5
 insulation                                   1     2     3     4     5
 Heating                                      1     2     3     4     5
 Boiler                                       1     2     3     4     5
 Electrical Wiring                            1     2     3     4     5
 Electrical Points & Switches                 1     2     3     4     5
 Check for Damp                               1     2     3     4     5
 Satellite/Cable                              1     2     3     4     5
 Mobile Reception                             1     2     3     4     5
 Hall
 Decoration                                   1     2     3     4     5
 Carpets                                      1     2     3     4     5
 Storage                                      1     2     3     4     5
 Living Room
 Decoration                                   1     2     3     4     5
 Carpets                                      1     2     3     4     5
 Storage                                      1     2     3     4     5
 Dining Room
 Decoration                                   1     2     3     4     5
 Carpets                                      1     2     3     4     5
 Storage                                      1     2     3     4     5
 Bedroom 1
 Decoration                                   1     2     3     4     5
 Carpets                                      1     2     3     4     5
 Storage                                      1     2     3     4     5
Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                        STEP 9: page 6 of 7
                                                                                                                               Home Buyers’ Guide   Home Guides



         STEP
                  9
                         Viewing checklist
Mark out of 5 - circle your choice      1 Bad           2 Worrying          3 Average            4 Good          5 Brilliant
 Bedroom 2                                                                 Comments
 Decoration                                   1     2     3     4     5
 Carpets                                      1     2     3     4     5
 Storage                                      1     2     3     4     5
 Bedroom 3
 Decoration                                   1     2     3     4     5
 Carpets                                      1     2     3     4     5
 Storage                                      1     2     3     4     5
 Bathroom/En-suite 1
 Shower/Bath                                  1     2     3     4     5
 Decoration                                   1     2     3     4     5
 Floor covering                               1     2     3     4     5
 Storage                                      1     2     3     4     5
 Bathroom/En-suite 2
 Shower/Bath                                  1     2     3     4     5
 Decoration                                   1     2     3     4     5
 Floor covering                               1     2     3     4     5
 Storage                                      1     2     3     4     5
 Kitchen
 Units                                        1     2     3     4     5
 Appliances                                   1     2     3     4     5
 Lighting                                     1     2     3     4     5
 Decoration                                   1     2     3     4     5
 Floor covering                               1     2     3     4     5
 Storage                                      1     2     3     4     5
 Other
 Decoration                                   1     2     3     4     5
 Floor covering                               1     2     3     4     5
 Storage                                      1     2     3     4     5
Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                        STEP 9: page 7 of 7
                                                                                                                   Home Buyers’ Guide   Home Guides




              STEP
                       10       (Part 1) Making an offer in England, Wales
                                and Northern Ireland (For making an offer in Scotland see Step 10 part 2)
                                You’ve looked at several places and you think you like the look of one. What next?
Putting in an offer
                                Putting in an offer                                    Solicitors and fees
The deposit for the seller      Once you’ve found the property you want, you           It’s important to get a good solicitor (or conveyancer)
Solicitors and fees             will need to put in a ‘subject to survey’ offer to     to deal with all the legal parts of the sale (known as
                                the seller or the estate agent.                        conveyancing) and who will carry out searches (for
                                                                                       example to find any likely rights of way, or changes
Part 2:                         The deposit for the seller                             or developments due in the area that might affect the
Making an offer in Scotland                                                            property) and deal with the seller’s solicitors. They
                                You will sometimes be asked to pay a deposit to
                                the seller or estate agent, to show your intention     will also need to hold your deposit on the property
                                or commitment to buying the property. These deposits   (the difference you are personally paying between the
                                normally range from around £500 to £1000 and           asking price and what the mortgage lender is giving).
                                are usually re-payable should the sale fall through.   You need to find one you can trust and word of mouth
                                Remember that this is in addition to the main          is often the best way; otherwise contact the Law
                                mortgage deposit you will need.                        Society or the Council of Licensed Conveyancers.
                                                                                       Make sure you get a quote first!




                                                                               SOLICITORS
Available on
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products and services



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                                                                                                                               STEP 10: page 1 of 3
                                                                                                                           Home Buyers’ Guide   Home Guides




              STEP
                       10       (Part 2) Making an offer in Scotland
                                (For making an offer in England, Wales and Northern Ireland see Step 10 part 1)

                                The property market in Scotland works very differently to the property system in
                                the rest of the UK. For instance, very few houses and flats in Scotland are leasehold,
Role of solicitors
                                the vast majority are freehold.
The Home Report
Surveys
                                Role of solicitors                                             The Home Report
                                In Scotland the solicitor plays a greater part in buying       A seller must have a Home Report pack prepared.
Putting in an offer             homes, than in the rest of the UK. Solicitors in Scotland      The Home Report pack consists of three compulsory
The deposit for the seller      are usually also estate agents; most are members of            documents that provide buyers and sellers with
                                solicitors’ Property Centres, who have showrooms,              information about the condition and value of homes
Final preparations              websites and newspapers, where properties are                  before an offer to purchase is made:
Completion                      advertised collectively from member solicitors in an               Property Questionnaire
                                area. Of course estate agents do operate in Scotland               an Energy Report
                                too, but have a far smaller share of the market.
Part 1:                                                                                           Single Survey
Making an offer In England,     If you want to buy a house in Scotland, it is necessary
                                                                                               The Property Questionnaire is completed by the seller
Wales and Northern Ireland      to use a Scottish solicitor. So when you see a property
                                                                                               of the home. It contains information about the home,
                                you like, the first thing you should do is find a solicitor
                                                                                               such as Council Tax banding, factoring arrangements
                                to act for you. Do some research, ask friends, family or
                                                                                               and any alterations made to the home.
                                work colleagues for recommendations and ask for an
                                estimate of their charges for buying a home. Approach          The Energy Report shows the home’s energy efficiency
                                several local solicitors as fees vary, check if it is a fixed   rating and assesses its environmental impact. It also
                                fee or variable and check if it includes all outlays (such     recommends ways to improve its energy efficiency.
                                as stamp duty, search fees, land registration fees, etc.).
Available on                                                                                   The Single Survey contains an assessment by a
www.NationwideEducation.co.uk
                                                                                               Surveyor of the condition of the home, a valuation and
Independent of Nationwide
products and services                                                                          an accessibility audit for people with particular needs.


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                                                                                                                                       STEP 10: page 2 of 3
                                                                                                                        Home Buyers’ Guide   Home Guides




              STEP
                       10       (Part 2) Making an offer in Scotland

                                Surveys
                                The Single Survey may be acceptable to your lender.        document is then a binding contract. Neither side can
                                However, some mortgage lenders may insist on having        withdraw without having to pay compensation.
                                an additional survey completed, paid for by you, the
Role of solicitors              buyer. If the property is older or the survey raises       The deposit for the seller
                                concerns you might want to get a Structural Survey done.   Any deposit will be held by your solicitor in a special
The Home Report                                                                            account, where it will gain interest until the sale.
Surveys                         Putting in an offer                                        Estate agents are not permitted to hold deposits.
                                When you want to make an offer on a property, your         Remember that this is addition to the main mortgage
Putting in an offer             solicitor may recommend ‘noting an interest’ which         deposit you will need.
The deposit for the seller      puts you under no obligation, but will mean that the
                                seller’s solicitor or estate agent will let you know if    Final preparations
Final preparations              anyone else is interested. If two or more people are       After a binding contract has been agreed, your solicitor
Completion                      interested in buying a property a closing date can         will prepare a number of documents, including a
                                then be fixed and sealed ‘offers’ are made by all those     ‘Disposition’ which will transfer ownership of the
                                interested. If there are no other notes of interest,       house to you.
Part 1:                         an offer may be made immediately. However, in the
Making an offer In England,                                                                They will also make all the financial arrangements for
                                current economic climate, many homes are being
Wales and Northern Ireland                                                                 settling on the agreed date of entry, including liaising
                                offered at fixed prices.
                                                                                           with your mortgage provider. You will also be asked to
                                Your offer will be submitted by your solicitor to the      make sure any additional funds are with your solicitor
                                seller’s solicitor or estate agent and should include      in advance of settlement, to cover the whole purchase
                                the price you want to pay and when you wish to have        price, stamp duty (if applicable) and registration dues
                                entry. In deciding what to offer, you will need to take    on the title.
                                into account how many others will be making offers,
                                however sellers do not always accept the highest offer     Completion
Available on
www.NationwideEducation.co.uk   - other conditions of the offer such as how soon you       On the date of entry your solicitor will send the
Independent of Nationwide       can move may influence their decision.                      purchase price to the seller’s solicitor. In exchange,
products and services                                                                      your solicitor will receive the signed ‘Disposition’ and
                                This is followed by written negotiation backwards and      other relevant documents... and the keys to your new
                                forwards, conducted by the solicitors. When                home!
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                                all conditions are agreed by both parties, the final
                                                                                                                                    STEP 10: page 3 of 3
                                                                                                   Home Buyers’ Guide   Home Guides




              STEP
                            11   Main mortgage application
                                 Applying for a mortgage may seem complicated, but remember the lender needs to
                                 make sure they lend responsibly. This Step includes tips on the main application and
                                 what documents you will need to provide.
The main application
What they will want              The main application
from you                         By the time you find a property you like and
                                 make an offer on it, the lender you got the
Before you start                 Agreement in Principle from might not be
                                 offering the best deal anymore, so re-check
                                 what others are offering. Once you have found
                                 the best mortgage, the lender will ask you to
                                 give them some more detailed information
              GAGE               about the property, your chosen solicitor and
        MORT                     the type of survey you want (see Step 12),
                                 as well as proof of your income. This is so they
                                 can make sure the property is suitable, you
                                 have chosen a reputable solicitor, can afford
                                 the repayments etc.
                                 Don’t get frustrated, this is so they can make
                                 an informed decision about lending you
                                 money, so it’s in your interest to give them
                                 the information. They – and you – need to
                                 be sure you can manage to make the regular
Available on                     repayments.
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                                                                                                                STEP 11: page 1 of 2
                                                                                                                     Home Buyers’ Guide   Home Guides




              STEP
                            11   Main mortgage application

                                 What they will want from you
                                 Proof of your:
                                                                                              your bank account (if not with the lender)
                                                                                              your solicitor’s/ conveyancer’s details
                                 1. Identification                                        And if an ‘interest only’ deal:
                                      passport, driving licence or birth certificate           proof that you have in place the means to repay
The main application                  and your National Insurance number                      the full loan amount at the end of the term, via
What they will want              2. Address                                                   investments, endowment, pension, ISA, etc.
from you                             proof of your address(es) for the last three
                                     years such as utility or council tax bills
                                                                                         Before you start
Before you start                                                                         Here are a few ways to make the process go smoothly.
                                 3. Employment
                                     employer and contact number (including your            Prepare beforehand: whether you are applying
                                     own details if you are self-employed)                  in person, on the phone or online, get every single
                                                                                            bit of information ready to hand. There is nothing
                                 4. Financial situation
                                                                                            more frustrating than having to go back and forth
                                      your income eg. – pay slips, P45, accounts
              GAGE                                                                          looking for stuff you could have found earlier.
        MORT
                                      if self-employed
                                      your outgoings – debts, loans, store accounts         Be thorough: when completing any forms, fill out
                                      etc., and your last few bank statements               every single little box that applies to you, no matter
                                                                                            how trivial you may find it. Don’t leave anything
                                      detailed breakdown of any assets such as
                                                                                            blank, as this should prevent you from having to go
                                      other accounts, properties, investments, etc.
                                                                                            back and redo your whole application again.
                                 5. Current mortgage
                                      your mortgage statement                               Just ask: If you are stuck for answers and are not
                                                                                            sure how to fill in the application, just ask your
                                      a redemption statement from your current lender.      adviser or lender to help you. Application forms
                                 6. Details of:                                             aren’t a test, they are there to help you get the
Available on
                                     the property you wish to buy                           right home for you.
www.NationwideEducation.co.uk        your choice of mortgage
Independent of Nationwide
                                     your valuation/survey requirements                  Most lenders or Independent Mortgage Advisers fill
products and services
                                                                                         out the application form with you, so don’t worry –
                                     your mortgage protection requirements
                                                                                         you will not be on your own!
Provided by                          your home insurance requirements

                                                                                                                                 STEP 11: page 2 of 2
                                                                                                                         Home Buyers’ Guide   Home Guides




              STEP
                       12       Surveys and insurances
                                Once your offer has been accepted (subject to survey), it’s then vital you carry out the
                                survey on the property. This will then ensure you are aware of the state the property is
                                in before you buy. This includes its value and any possible structural problems, etc.
Surveys
Insurances                      Surveys                                                      HomeBuyers Report:
                                Once your offer has been accepted (subject to survey),         This checks the condition of the property and
                                it’s then vital you arrange for a survey to be carried         its value
                                out on the property. Your lender will arrange for a             Usually for properties of reasonable condition
                                valuation to check that your property is worth the              up to 150 years old
                                asking price, but it will not give you details on what
                                                                                                Checks for major faults and estimated costs
                                may be wrong with the property.
                                                                                                to put right
                                A HomeBuyers Report or Full Structural Survey (also
                                                                                                Tells you what the value of the property is
                                now known as a Building Survey) on the other hand
                                (which are optional), examine the structure of the              It won’t tell you about any minor issues or the
                                building to find if there are any faults or problems             actual details of any major issues identified.
                                likely to happen – they can also help to re-negotiate        Structural Survey (or Building Survey):
                                the asking price, if faults are highlighted that will need
                                                                                                This is a comprehensive, detailed survey, which
                                to be put right! If you are buying a new home you
                                                                                                costs more than a Homebuyers Report
                                don’t need one of these detailed surveys as it should
                                have NHBC certificate (A National House Building                 Usually for older, unusual or listed buildings or
                                Council certificate gives a 10 year guarantee, covering          properties that have extensions or renovations
                                any major fault or problem in new homes).
                                                                                                Checks all parts of the property for faults (major
                                                                                                and minor) estimated costs to repair and if any
Available on
www.NationwideEducation.co.uk                                                                   further reports are needed
Independent of Nationwide
products and services
                                                                                                It won’t give you the value of the property so
                                                                                                a valuation will still be necessary.

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                                                                                                                                     STEP 12: page 1 of 2
                                                                                                                       Home Buyers’ Guide   Home Guides




              STEP
                       12       Surveys and insurances

                                Insurance
                                You know how important it is to take out insurance         Other types of insurance
                                to protect your home – both buildings and contents,        Now you have your home covered, what about you?
                                so why not use this opportunity to reassess your           Think about how your mortgage will be paid if you
Surveys                         cover? Remember to include in your calculations any        became unemployed, ill, injured or even died? While
Insurances                      new furniture or expensive electrical goods you may        there are State Benefits available, if you are under
                                have bought for your new home.                             pension age, you would not receive help with your
                                                                                           mortgage payments for 13 weeks and even then not
                                   Buildings Insurance: this covers you financially
                                                                                           enough to cover all your monthly repayments. There
                                   for any damage to your building (e.g. from fire,
                                                                                           are several kinds of insurance that you could look at to
                                   flood or wind). Make sure that you look at the level
                                                                                           safeguard your repayments:
                                   of cover as well as the cost of the policy: in the
                                   worst case scenario it will need to cover the cost of      Critical Illness: provides funds if you should
                                   rebuilding your home – not just what you paid for          became critically ill.
                                   it. Most mortgage lenders will insist on seeing this
                                                                                              Life Assurance: provides a lump payment to your
                                   is in place before completion. Often included as
                                                                                              next of kin should you die or become terminally ill.
                                   part of leasehold properties.
                                                                                              Income Protection: this can give a regular
                                   Contents Insurance: this is often overlooked
                                                                                              monthly income if you can’t work because of an
                                   because it’s another expense, but just think what
                                                                                              accident or illness.
                                   it would cost if you had to replace everything
                                   in your home because of flood damage, fire or                Mortgage Payment Protection: this can cover
                                   theft – furniture and furnishings, TV and audio,           your mortgage payments for a period of time if you
                                   all electrical goods and appliances, clothing and          become unemployed, or can’t work because of an
                                   jewellery!                                                 accident or illness.
Available on                                                                               (For further information on insurance please see
www.NationwideEducation.co.uk    Tip                                                       Appendix b Useful Contacts.)
Independent of Nationwide        You can often reduce the cost by getting
products and services
                                 buildings and contents cover together.

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                                                                                                                                   STEP 12: page 2 of 2
                                                                                                                     Home Buyers’ Guide   Home Guides




              STEP
                        13      Exchanging contracts and completion
                                At this point in the process there are only a few things left to do before the house
                                is yours!
Exchanging contracts            Exchanging contracts                                      Completion day
Final preparations              When you and your solicitor are happy to proceed,         A really important day with lots happening.
                                then it’s time to sign the contract. Once the seller      As you are likely to be moving house you may
Completion day                  has signed theirs too, then the solicitors will swap      need to take a day or two day off work to make
                                or exchange them.                                         sure everything gets done.
                                The deposit your solicitor is holding for you will           Transfer Payments: all monies are transferred
                                then be transferred to the seller’s solicitor ready for      to the seller.
                                completion. (If you pull out of the deal after this you
                                                                                             Keys: and at last the keys to your new property!
                                will probably lose your deposit.)
                                                                                          Congratulations... you have a new home!
                                Final preparations
                                Make sure you know exactly what is being done
                                by your solicitor, and when, as these last few days
                                are vital.
                                   Land Registry: your solicitor will do a final check
                                   to see nothing has changed and you should have
                                   the registered title of the property.


                                                                                                                             LD
                                   Transfer deed: this will be sent before completion

Available on
www.NationwideEducation.co.uk
                                   to the seller’s solicitor and shows you as the new
                                   legal landowner.
                                   Money transfers: all arrangements for the final
                                                                                                                          SO
Independent of Nationwide
products and services
                                   payments and getting the mortgage monies in.
                                   Final accounts: includes preparing all the details
Provided by                        of all monies already paid or due.

                                                                                                                                  STEP 13: page 1 of 1
                                                                                                                      Home Buyers’ Guide   Home Guides




              STEP
                        14      Getting organised before the move
                                It’s been a long process and you may feel that you are home and dry now you’ve sorted
                                your mortgage, found your home, and exchanged and completed contracts…well not
                                just yet, you need to make sure moving in is trouble free! We’ve given you a checklist of
As soon as you can
                                things to plan and book.
                                As soon as you can                                         Book removal company or arrange for family
                                                                                           and friends to help move you and your things.
                                  Plan your actual moving in date and book your
                                  time off work                                            – If you are using a removal firm, get quotes from
                                                                                             removal companies and negotiate to get the best
                                  If you are renting:                                        deal for your move
                                  – give notice to your landlord (you don’t want to pay
               O
 THINGS TO D
                                                                                           – Use someone from the British Association of
                                     both rent and a mortgage)                               Removers (BAR) or the National Guild of Removers
                 FIR        M
         REMOVAL                  – tell your existing utilities and telephone companies     and Storers (NGRS)
                                    when you are moving out of your present address        – Check your home insurance covers you for any
           UTILITIES                                                                         damage during the move, just in case!
                                  Confirm your moving date, your new address and
              PACKING             get new agreements with:
                                  – Gas, electricity water and telephone companies
                                  – Your local authority for Council Tax
                                  – The Post Office to redirect any post (there will be
                                    a charge for this)
                                  Start to sort all your things, clear out, sell on eBay
                                                                                                                 GILE
                                                                                                             FRA
                                  or locally, donate what you don’t need – don’t
Available on
www.NationwideEducation.co.uk
                                  move what you don’t need
Independent of Nationwide
products and services
                                                                                                                     FT04 10B
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                                                                                                                                   STEP 14: page 1 of 1
                                                                                                               Home Buyers’ Guide   Home Guides




              STEP
                       15       Moving day action plan and checklist
                                The time to move into your new home is here!
                                A few days before                                   See if you can visit the owners to help make sure:
                                  Check what time you can actually move in          – they’ve shown you where all the important
A few days before                                                                     things are like water cocks, fuse boxes, and gas/
                                  and plan everything around that
Moving day                                                                            electricity meters
                                  Confirm all details with the removal company
                                                                                    – you have looked into and sorted out a parking
                                  and or friends
                                                                                      permit (if needed)
                                  Speak to neighbours, at both your current home    – that they have had final meter readings done
                                  and your new home, and check you can get            or booked
                                  parking access for the removals van
                                                                                    – that all window, garage, shed, internal door and
                                  Pack all things (except those you will need         front and back door keys and spares are all left
                 FR
                  AG




                                  before the day)                                     labelled and in one place
                    IL
                      E




                                  – Label each box with the contents and the room   – that all relevant manuals, leaflets etc for boiler
                                    they should go in                                 or any appliances left in the property.
                                  Place all valuable or important things            Settle all your present bills
                                  somewhere safe
                                                                                    Let others know:
                                                                                    – your bank, building society, insurance companies,
                                                                                      credit card companies, Inland Revenue, DVLC,
                                                                                      Council Tax office, DSS office, Electoral Roll,
                                                                                      employer, doctor, dentist, etc. And don’t forget to
                                                                                      let all your friends and family have your new
Available on                                                                          address too!
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                                                                                                                           STEP 15: page 1 of 2
                                                                                                                    Home Buyers’ Guide   Home Guides




              STEP
                       15       Moving Day action plan and checklist

                                Moving day
                                  Make sure you have a ‘moving box of essentials’          Make sure insurance cover is immediate
                                  – Kettle, mugs, tea, coffee, milk, sugar                 Put each box into the room you intend the things to
                                  – Cleaning things: cloths, detergents, dustpan and       be in, and don’t unpack everything at once
A few days before
                                    brushes, vacuum cleaner and dustbin bags               – Start with the kitchen and the foodstuffs
Moving day                        – Toilet paper, kitchen towels and tissues               – Then the bedroom so you can have somewhere to
                                  – Torch, light bulbs, pliers and screwdrivers              sleep even if you don’t finish in one day!
                                  – Pens and paper and post it notes

                                  Make sure all services are connected- gas /
                                  electricity /water /phone:
                                  – take your own readings (remember you are
                 FR
                  AG




                                    responsible for the costs even if you are not moving
                    IL
                      E




                                    immediately).
                                  Make sure you know where the trip switches, water
                                  cocks, fuse boxes, and gas / electricity meters are




Available on
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                                                                                                                                STEP 15: page 2 of 2
                                                                                                                  Home Buyers’ Guide   Home Guides




              STEP
                       16       After the move
                                The work doesn’t stop once you have moved into your new place! Here are a few things
                                to consider after you have moved into your new home.
As soon as possible             As soon as possible
First month in                    Get to know your area: it may be a completely            Get numbers of local take-away places:
                                  new area to you, so there’s no better way to start       a simple thing, but having phone numbers to
                                  to feel at home than familiarising yourself. Get to      hand of good local take-aways can help if you’re
                                  know your way about, take regular walks around           overwhelmed with your unpacking, are too tired to
                                  and get to know the nearby street names, where           cook or are late in from work.
                                  local shops are, schools and night schools, libraries,
                                                                                           Don’t forget to get a TV licence registered
                                  social places to go like cinemas and clubs, places of
                                                                                           at the new address!
                                  worship, transport routes, etc.
                                  Get to know your neighbours: take time to
                                  introduce yourself, you’ll be surprised how a
                                  simple ‘good morning’ can make people’s day
                                  and you never know it could be the start of
                                  good friendships. It’s always good to build up
                                  relationships with neighbours as you can help
                                  each other out in times of need, by taking in
                                  deliveries, keeping an eye out if you’re away or
                                                                                                            CE?
                                  in an emergency.
                                                                                                  TV LICEN
                                  Register with doctor, dentist etc: as soon as
                                  possible, register with a local doctor and dentist,
Available on
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                                  and if necessary an optician. You can go on
Independent of Nationwide
                                  recommendation or whoever is nearest, but be
products and services             aware there may be waiting lists. You could use
                                  the NHS website.
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                                                                                                                              STEP 16: page 1 of 2
                                                                                                                Home Buyers’ Guide   Home Guides




              STEP
                       16       After the move

                                First month in
                                  Check your contents insurance: you should            Think carefully before buying new
                                  have checked that your contents cover was in place   furnishings and appliances: try not to rush out
                                  before the move, but just double check that the      and buy lots of new furnishings and appliances
As soon as possible               amount covered is sufficient to cover all the new     in the first months – instead, wait to see whether
First month in                    items you may have bought since.                     the level of all your outgoings is as you expect, so
                                                                                       you can budget sensibly. Perhaps buy something
                                  Check the gas and electricity are connected
                                                                                       monthly as needed.
                                  and in your name: you should check these are
                                  connected on your moving in day, and within          Decoration: again the temptation is to decorate
                                  the first month you should double check that it is    immediately to get it to feel like yours. If possible,
                                  registered in your name, that the correct ‘moving    try and live with the previous owners’ décor,
                                  day’ readings are being used, when you will be       plan the urgent changes and try to economise by
                                  first billed and that you don’t get bills for the     keeping all walls similar colours so you can bulk
                                  previous owner.                                      buy paint and then create personal colour schemes
                                                                                       with accessories, cushions, lampshades, etc. when
                                                                                       finances allow.




                                                                       HITE
                                                                            T
                                                                        LIAN
                                                                    BRIL
Available on
www.NationwideEducation.co.uk
                                                                     W
Independent of Nationwide
products and services



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                                                                                                                            STEP 16: page 2 of 2
                                                                                                                                                                                Home Buyers’ Guide   Home Guides




                STEP
                       17       Budgeting
                                We live in difficult economic times, so budgeting wisely has never been more important!
                                Why not use this Budget Sheet to stay on top of your finances?
Budget Sheet                    If you are viewing the Flash version of this guide, select ‘PDF’ in the bottom left corner to open the budget sheet.




                                              STEP   17 Budgeting                                                                                                                Home Buyers’ Gui




                                                                       Amount              Notes                                                                       Amount     Notes
                                    Income In                                                                                      Home Costs Out
                                    Salary                                                                                         You may have to estimate some
                                                                                                                                   of these - ask family and friends
              UE
                                    Interest from savings

        OVERD
                                                                                                                                   to help you work out
                                    Gifts
                                                                                                                                   Mortgage (or rent)
                                    Other income
                                                                                                                                   Council Tax [or Domestic Rates
                                    Total Income                                                                                   for Northern Ireland]
                                                                                                                                   Buildings and content insurance *
                                    Personal Costs Out
                                                                                                                                   Mortgage protection plan *
                                    Food and drink
                                                                                                                                   Service charges (on leasehold)
                                    Travel (car & public transport)
                                                                                                                                   Landline telephone and internet
                                    Insurance                                                                                      Utility bills, (e.g. Gas, Water,
                                    Clothes                                                                                        Electricity)
                                    Toiletries                                                                                     TV licence
                                    Household necessities                                                                          Total Home Costs
                                    Mobile phones                                                                                  * see step 9 for more details
                                    Entertainment
                                    Clubs or memberships                                                                                                               Amount     Notes
                                    Credit card payments                                                                           Total personal costs out
                                    Other outgoings                                                                                Add total home costs out
Available on                        Total Personal Costs Out                                                                       Total Costs Out
www.NationwideEducation.co.uk                                                                                                      Total Income in
                                                                                                                                   Minus Total Costs Out
Independent of Nationwide
                                                                                                                                   – disposable income for any
products and services                                                                                                              savings some luxuries and
                                                                                                                                   emergencies

                                    Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk
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                                                                                                                                                                                             STEP 17: page 1 of 2
                                                                                                                                              Home Buyers’ Guide   Home Guides



        STEP
                  17         Budgeting
                                       Amount          Notes                                                                      Amount            Notes
Income In                                                                                      Home Costs Out
Wages/Salary                                                                                   Mortgage
Interest from savings                                                                          Council Tax [or Domestic Rates
Benefits                                                                                        for Northern Ireland]
Other income                                                                                   Buildings and contents insurance
Partners income                                                                                Mortgage protection plan
Total Income                                                                                   Service and maintenance charges
                                                                                               Landline telephone and internet
Personal Costs Out                                                                             Utility bills, (e.g. Gas, Water,
Food and drink                                                                                 Electricity)
Travel (public transport)                                                                      TV licence
Car (fuel, insurance, tax)                                                                     TV satellite/cable costs
Insurance (home, travel, health etc)                                                           Total Home Costs
Childcare costs                                                                                Now add up your personal and home costs and take the total away from your income,
Clothes                                                                                        then you should know how well you are doing. Remember a good budget allows for
Toiletries                                                                                     saving, some luxuries and an amount for emergencies such as repairs and maintenance!

Household necessities                                                                                                             Amount            Notes
Mobile phones                                                                                  Total personal costs out
Entertainment                                                                                  Add total home costs out
Clubs or memberships                                                                           Total Costs Out
Credit card payments                                                                           Total Income in
Other outgoings                                                                                Minus Total Costs Out
Leisure and recreation, sports,                                                                = disposable income
hobbies, holidays
Total Personal Costs Out

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              STEP
                       18       Economising and living sustainably
                                As you settle into your new home, aim to have a secure and sustainable future!
                                Ways to economise and live                               Preparing for unexpected events
Ways to economise and           sustainably                                              However well we plan, there will always be things
live sustainably                There are many creative ways to economise! And no        that happen outside of our control, but you can
                                matter what your circumstances, it’s important to live   make provisions and that’s why insurance can be so
Preparing for unexpected                                                                 important, at least to cover mortgage payments and
                                within your means and only use what you need – so
events                                                                                   have some income if you experience:
                                make sustainable living a personal goal!
Getting behind with             Some ways in which you can do this include:                 Unemployment: for example, through a
mortgage repayments                                                                         mortgage payment protection plan, or an income
                                  Reduce, reuse, recycle to cut down on your waste
                                                                                            protection plan
                                   Renting out a room to allow for an extra income.
                                                                                            Illness (long term): for example, through critical
                                   The Government rent-a-room scheme allows you to
                                                                                            illness, income protection or life assurance
                                   receive £4,250 a year in rent tax free.
                                   Save energy – turn the thermostat down, even by
                                   1 degree makes a difference!
                                   Save water by only using what you need
                                   Look for and buy energy efficient appliances,
                                   not just those that are cheap
                                   Be carbon conscious when renovating and doing
                                   ‘DIY’ – look into government grants for projects
                                   to increase your home’s energy efficiency such as
Available on                       draught-proofing or insulation
www.NationwideEducation.co.uk
Independent of Nationwide          Compare deals offered by energy suppliers to get
products and services              the best deal for you.

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                                                                                                                                 STEP 18: page 1 of 2
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              STEP
                       18       Economising and living sustainably

                                Getting behind with mortgage
                                repayments
                                One of the worst things you can do if you find yourself   You should make sure you know how each of these
                                in difficulty with mortgage repayments is to bury your    options will have a bearing on your payments, the
Ways to economise and
                                head and try to ignore things, thinking they will go     length of your loan and the overall amount it will cost.
live sustainably
                                away – they won’t, and often they will only get worse!   For example, often deferring a payment can lead to
Preparing for unexpected        The moment you realise you cannot make a mortgage        incurring additional interest. Remember too that many
events                          payment, act! Go to your lender first.                    lenders will charge penalty fees for late payments
                                                                                         which will be added to your arrears.
Getting behind with             They may offer to:
mortgage repayments                give you a payment holiday                            Your lender will usually make every effort to help
                                                                                         you avoid repossession by reaching a workable
                                   accept reduced payments from you in the               settlement with you, so it is best to keep the lines of
                                   short term                                            communication open with them. You may also want
                                   agree to change or lengthen the term of your loan     to seek the help of an independent adviser, or contact
                                                                                         your local Citizens Advice Bureau or Shelter Advice
                                   allow you to add arrears to the total mortgage debt
                                                                                         Centre, who may help with the court paperwork and
                                   temporarily convert a ‘repayment’ to an               look for ways to help you keep your home. It’s never
                                   ‘interest only’ mortgage.                             too late to get advice, so don’t just walk away or hand
                                                                                         over your keys to your lender without finding out if
                                                                                         you have other options!




Available on                                                    E
                                                            RDU
www.NationwideEducation.co.uk                            OVE
Independent of Nationwide
products and services



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                                                                                                                                 STEP 18: page 2 of 2
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              STEP
                        19      Top ten tips
                                Top tips for home buyers
                                1. Make good use of all the checklists and action       9. When viewing, stay focused on your needs and
                                   plans to get organised, stay focused and find the        use our Viewing Checklist at each property. It will
Top tips                           home of your dreams!                                    help you review and compare properties later
                                                                                           when making the all important decision.
                                2. Explore all the buying options... just because
                                   house prices seem high, it doesn’t necessarily       10. Don’t forget to get a new budget planned and
                                   mean that you can’t afford to buy.                       in place as soon as you can after your move.

                                3. Do your sums! Take the time to calculate the real
                                   cost of the various mortgage options and how
                                   much you can afford to borrow.

                                4. When choosing a mortgage, remember to shop
                                   around and compare like with like.

                                5. If you decide to get help from a mortgage adviser,                                    LONGER
                                   broker or independent financial adviser, do check                                       TERM
                                   that they’re regulated by the Financial Services                                      OPTION 1
                                   Authority.

                                6. Check out your credit rating in advance. There
                                                                                                     FEE
                                                                                                     FREE
                                   may be steps you can take to improve it.
                                                                                                   OPTION 2
                                7. Remember all the one-off fees and costs you face
Available on
                                   when buying a property and factor them in.
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Independent of Nationwide
                                8. Remember ‘location, location, location’! Don’t
products and services              make the mistake of picking the right house but in
                                   the wrong place.
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              STEP
                      20        Frequently Asked Questions
                                1. If I chose an interest only mortgage, what                  4. I have heard of an Energy Performance
                                   type of investment should I pick to run along                  Certificate (EPC) but what is a Predicted
                                   side it?                                                       Energy Assessment (PEA)?
                                   You have several options including investing in an ISA         This is the energy certificate used by property
                                   (individual savings plan), a pension or an endowment;          developers of new build homes that are under
                                   all these offer tax benefits. Your mortgage lender may          construction or being sold ‘off-plan’. When a home is
                                   well be in a position to help in this regard. Remember         physically completed an EPC is required.
                                   though that an inheritance or the disposing of another
                                   property in the future may also provide the funds           5. What happened to HIPs?
                                   you need, although you need to assess the risk factor          The legal requirement to have a Home Information
                                   involved.                                                      Pack (HIP) prepared in order to market your home, was
                                                                                                  removed in May 2010. However, Energy Performance
                                2. Are income multipliers not used anymore,                       Certificates (EPCs) are still required and, in Scotland, a
                                   when deciding how much you can borrow?                         Home report pack is still needed.
                                   In the past lenders would have asked you how much
                                   your income (or joint income) was and multiplied this
                                                                                               6. I have found the home I want, should I offer
                                   by an amount (most commonly 3 times, or 2.5 times              the asking price?
                                   if a joint application) and arrived at a figure that you        There is no harm in making an offer that is below the
                                   could borrow up to. These days lenders are trying              asking price, especially in this current housing market.
                                   harder to personalise your borrowing capability and            The seller or their agent can always come back to you
                                   are using more sophisticated lending criteria, which           and negotiate your offer up... you can’t negotiate yours
                                   includes more than just income multipliers.                    down!

                                3. When should I sell my present home?                         7. Should I ask for the property to be taken off
                                   In this current economic climate there are mixed
                                                                                                  the market?
                                   views on whether to sell first or buy first. However all         For any offer you make you should state that you want
Available on
                                   things considered, you are likely to be in a far stronger      the property taken off the market. If the house is left
www.NationwideEducation.co.uk
                                   position if you have sold first. You can always state in        on the market after you make your offer, there is a
Independent of Nationwide
products and services              the contract with your buyer that you will not move out        far greater chance of you being gazumped. However,
                                   before you have a new home to go to.                           the seller will want to know you are serious and may
                                                                                                  ask for a deposit. Remember though that buying in
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                                                                                                                                          STEP 20: page 1 of 1
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                 Appendix a – Glossary                                                                                                                        A-B

 Advance            Another term for the mortgage loan; the amount your                       Asking price       The amount the seller values their property at and wants
                    lender agrees to lend you                                                                    to get if it’s sold. Remember you may be able to negotiate
                                                                                                                 if you think a property is too highly priced
 Agreement in       An initial document from your lender that gives you an idea
 principle          of the amount they are likely to lend you. This certificate                Assets             Anything that you own of a monetary value
                    is not a guarantee, but is often needed when dealing with
                    estate agents, so they have an idea of the size of your                   Bank               An organisation that offers a range of services (e.g. current
                    mortgage and if you can afford the property. Also known as                                   and savings accounts, loans and mortgages), and has
                    a ‘lending decision’ or ‘decision in principle’                                              shareholders
 Annual             This is the interest rate you would pay over a year period
                                                                                              Bank of            Responsible for setting interest rates, issuing bank
 Percentage         and helps you to compare the ‘cost’ of borrowing between
                                                                                              England            notes and maintaining a stable financial economy; the
 Rate (APR)         different mortgage lenders (also known as the ‘overall cost
                                                                                                                 Government bank and also a lender for commercial banks
                    for comparison’). It takes into account interest to be paid,
                    length of the repayment term and any other charges. It also               Base rate          The interest rate set by the Bank of England which is
                    assumes you will keeping the mortgage for the whole term                                     used as a benchmark by lenders to set their own charges,
                    and does not take into account possible changes in interest                                  which would generally be higher. This is reviewed from
                    rates. Note: if you plan to remortgage at the end of your                                    time to time throughout the year and can fluctuate (go up
                    initial deal period, APR may not be the best comparison as                                   and down)
                    it assumes you will have the mortgage for the whole term
 Arrangement        Charged by lenders to set up a mortgage loan. These are                   Beneficial joint This means the property is jointly owned, you don’t own a
 fees (or           normally payable upfront and non-refundable                               tenants         specific share in the property and if you die the property
 booking fees)                                                                                                goes to the other owner

 Arrears            When payments haven’t been paid on the due date they                      Binding            An agreement that is legally enforceable
                    are said to be in arrears                                                 contract




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                 Appendix a – Glossary                                                                                                                        B-C

 Bridging loan      A special type of loan which is taken out to overcome a                   Capital            The amount of money you have actually borrowed, or
                    short term cash flow problem, usually needed when you                                         still owe on your property (not including interest or other
                    buy a property before you sell                                                               charges)
 Broker             A person who gives advice (usually independent                            Capital Gains      A tax levied on profit from the sale of property or of
                    advice) on a mortgage (also called ‘mortgage broker’                      Tax                an investment
                    or ‘intermediary’). If using a broker, make sure they are                 Capital and        Where you pay off part of the ‘capital’ (amount borrowed)
                    registered                                                                Interest           as well as interest each month (as opposed to ‘interest
 Buildings          A type of insurance that covers you financially for any                    mortgage           only’). This usually means that everything (capital and
 insurance          damage to your building (e.g. fire, flood, wind). Sometimes                                    interest) will have been fully paid off by the end of the
                    called ‘home insurance’ when grouped together with                                           agreed term. Also known as a repayment mortgage
                    contents insurance                                                        Capped Rate        A type of mortgage where you have a guaranteed
 Building                                                                                     mortgage           maximum amount that you have to pay each month.
                    A financial company that offers the same kinds of services
 society            as a bank (e.g. letting you save or borrow money) but it is                                  Your payments may go up or down under that amount,
                    owned by its members (customers)                                                             as interest rates increase or decrease, but you wouldn’t
                                                                                                                 have to pay more above that maximum even if the interest
 Buoyant            When property is selling and prices are rising                                               rates rise higher
 market                                                                                       Cashback           A type of mortgage that gives you an extra lump sum of
 Buy-to-let         People who buy property to rent out as a form of                          mortgage           cash at the beginning of your mortgage, for you to spend
 investors          investment                                                                                   on anything you like (but usually the house!); often linked
                                                                                                                 with variable rate mortgages. However, be aware that with
 Buy-to-let         Specific mortgages that are aimed at those that buy                                           some cashback mortgages you will need to pay this back
 mortgage           property to rent out                                                                         (will be added to your overall mortgage)




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                 Appendix a – Glossary                                                                                                                        C-C

 Chain free         Where a purchaser is not dependent on other properties                    Completion         The day when all money is transferred and the buyer has
                    selling first before buying or where the vendor is not reliant             day                access to the property
                    on their purchase proceeding before they can complete the
                    sale of their house                                                       Contents           Insurance against damage to or theft of the contents of
                                                                                              insurance          your house including furniture and furnishings, TV and
 Claim for          A legal claim, made by the mortgage lender, for possession                                   audio, all electric goods and appliances, clothing and
 possession         of a mortgaged property because the borrower has not                                         jewellery
                    paid their mortgage loan; this is the next step after a notice
                    of default has been issued (see Notice of Default)                        Contract           A legal document showing an agreement between two
                                                                                                                 people, in this case between the lender and the borrower
 Collared           A type of mortgage usually found in combination with a                                       or the seller and the buyer
 mortgage           capped or tracker mortgage where there is a set lower level
                    (the ‘collar’), so your payments would never fall lower than              Conveyancing       The process of transfering ownership from one person
                    that level                                                                                   to another
 Collateral         Something of value that is given as a guarantee to the                    Conveyancer        The professional required to carry out the legal work
                    lender that you are able to payback the loan; in the case of              (or Solicitor)     involved in the process of buying and selling property
                    mortgages it is the house itself
 Commission                                                                                   Council Tax        A letter code indicating assessment of a property market
                    The fees charged by estate agents, usually calculated as a
                                                                                              banding            value on a specific date. This is given for the administration
                    percentage of the final selling price of the property; this is
                    known as the rate of commission                                                              of council tax bills and will affect how much you pay

 Compensation Something, typically money, awarded to someone for loss,                        County Court       Is an order made in a county court for a debt to be repaid
              injury, or suffering                                                            Judgements         in England and Wales
                                                                                              (CCJs)
 Completion         The final stage of the sale when the ownership changes
                    hands from the seller to the buyer                                        Credit rating      See Credit score



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                  Appendix a – Glossary                                                                                                                      C-E

 Credit score       A score given to a person based on their ‘creditworthiness’               Deposit            The money you put in upfront towards buying a house,
                    (how big a risk there is for you managing to keep up with                                    usually at least 5% of the property cost, depending on
                    repayments), used to assess credit and loan applications;                                    how much money you have saved and the lender of the
                    done through a credit agency                                                                 mortgage
 Credit             These are specialist companies that are used to check your                Disposition        The Scottish legal term for the formal document
 reference          credit rating or worthiness                                                                  transferring ownership or ‘title’ to land
 agency
                                                                                              Draught-           The process of filling in unwanted gaps in a building
 Credit             See Credit Score                                                          proofing            to reduce heat loss and save energy
 worthiness                                                                                   Early              An amount of money (a charge) you may have to pay
 Current            This combines your current account and your mortgage                      repayment          a lender if you either move your mortgage to another
 account            into one. You still make a monthly mortgage payment, but                  charge (ERC)       lender during the special deal period or overpay by more
 mortgage           any savings or money paid in acts as an overpayment                                          than you are allowed within the agreed period

 Daily interest     The interest on a mortgage is calculated on a daily basis, so             Endowment          A long-term savings policy (usually between 10 and 25
                    you only pay interest on what you actually owe                            policy             years), which can usually be used to repay the capital
                                                                                                                 element of an interest-only mortgage at the end of the term
 Debt               To add your debts together to help in paying them off. It
 consolidation      may be possible to increase your mortgage to pay off debts,               Energy             This certificate shows how much energy a building uses,
                    but it’s best to seek advice before doing this. You need to               Performance        and how energy efficient it is, looking at things such as
                    think very carefully before securing other debts against                  Certificate         insulation and electricity use. The certificate gives the
                    your home as your home may be repossessed if you do not                   (EPC)              building a rating from A to G, where A is the most and
                    keep up repayments on your mortgage                                                          G is the least energy efficient
 Decision in        See Agreement in Principle                                                Equity             The difference between the value of the property, and
 principle                                                                                                       what you owe as a mortgage




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                 Appendix a – Glossary                                                                                                                        E-G

 Equity release Where you can borrow more on a mortgage against any                           First Buy          Only for First Time Buyers and new-build properties. Unlike
                increase in the value of your property                                                           with shared ownership, in First Buy shared equity the
                                                                                                                 first time buyer owns the property, with as little as a 5%
 Evicted            To force someone to move out of a property by legal means
                                                                                                                 deposit. A shared equity mortgage covers 75-80% of the
 Evidence           Legal proof of land ownership, normally in the form                                          property and a 15-20% shared equity loan covers the rest
 of title           of a deed                                                                                    of the deposit.
 Exchange           The swapping of contracts between the seller and the                      Fixed Rate         A type of mortgage where the rate of interest stays fixed for
 of contracts       buyer usually carried out by their solicitors and, once                   mortgage           an agreed period of time (2, 5, 10 years or longer) allowing
                    exchanged, it’s a legally binding agreement                                                  monthly payments to remain the same throughout
 Exit fees (also Charged by some lenders when you pay off your                                Freehold           Where the sale includes the property and the land on
 known as        mortgage early                                                                                  which the property is built, and you have complete
 redemption                                                                                                      ownership of both for an unlimited time
 charges)
 Expenditure        The amount of money spent on goods and services                           Freeholder         A person who owns a freehold building or land estate

 Extended           Some lenders specify a set time beyond a mortgage’s                       FSA Register       A list of firms, advisers, etc that are regulated by the
 tie-in             special deal period, during which you will be charged if you                                 FSA, which means they meet certain standards and give
                    pay off or move your mortgage                                                                information that you can trust

 False economy An action that saves you money in the beginning but which                      Gazumping          When the seller accepts a buyers offer and then later
               in the longer term results in being more costly                                                   rejects it, to accept a higher offer from another buyer

 Financial       An independent non-governmental body that regulates                          Gazundering        This is when a buyer who has agreed to pay a certain
 Services        the financial services industry in the UK                                                        amount for a property, then tries to reduce the price they
 Authority (FSA) (www.fsa.gov.uk)                                                                                will pay at a crucial point in the selling process




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                 Appendix a – Glossary                                                                                                                        G-I

 Ground rent        The amount of money a leaseholder has to pay to the                       Home Contents Contains details of a property’s fixture and fittings (e.g.
                    freehold owner as a condition of taking a lease; usually paid             form          curtains, carpets, kitchen appliances) which the seller is
                    on an annual basis                                                                      including, excluding or willing to negotiate over in the sale
 Guarantor          A person who guarantees you will pay the mortgage                         Home Report        An information pack, prepared by the seller containing key
                    repayments. If you don’t pay they are liable to have to pay                                  information about the property (a requirement in Scotland)
                    them themselves. Often parents or relatives are guarantors
                    for first time home buyers to help them to afford a property               Home           Where you sell your home, or part of it, to a company in
                                                                                              reversion loan exchange for a cash lump sum, a regular income or both
 Guarantor          A type of mortgage where a guarantor ensures the lender
 mortgage           receives the mortgage payment each month, by paying                       House              Where two home owners, that want to live in different
                    the mortgage if the borrower is unable to. This does not                  swapping           homes or locations, trade homes
                    necessarily need to mean jointly owning the property
                                                                                              Housing            Independent not-for-profit organisations that provide
 HomeBuy            A Government initiative to help eligible applicants in                    Associations       affordable homes (for rent or to purchase) for people
 Direct             England to buy their first home. Entitles applicants to a                                     in need
                    loan of 30% the cost of the property (called an ‘equity
                    loan’), which must be paid back when the property is sold                 Income             The amount of money you earn or you receive in gifts

 HomeBuyers         A report on the condition of the property showing the value               Income             The number by which your income can be/ is multiplied,
 Report             of the property, any major faults and estimated costs to fix;              multiples          so a lender can decide how much you can borrow
                    though it does not include any detailed, or minor issues                  Income             This insurance can give regular monthly income if you
                                                                                              protection         can’t work because of an accident or illness
 Home               Information about the physical condition of a property,
 Condition          done by a certified Home Inspector; this is helpful for the                Independent        A person who gives independent, unbiased advice on a
 Report             buyer, seller and lender. A Home Condition Report usually                 Financial          range of financial products (including mortgages), acting in
                    forms part of the Home Report                                             Adviser (IFA)      the best interest of the client



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                 Appendix a – Glossary                                                                                                                            I-L

 Individual         A tax-free savings account, where the interest earned                     Joint              When two or more people apply for a mortgage together
 Savings            does not need to be declared on the savers tax return.                    application        (e.g. a couple)
 Account (ISA)
                                                                                              Joint mortgage When a lender buys a property with someone else (e.g.
 Inflation           An increase in the general level of prices                                               parents or a partner), usually for financial reasons, in which
                                                                                                             case the property would be jointly owned
 Interest           The amount of money that is charged on money borrowed
                                                                                              Kerb appeal        The attractiveness of a home to potential buyers when
 Interest only      A type of mortgage where each month you only pay the                                         viewed from the road
 mortgage           interest on what you have borrowed. It usually means lower
                    monthly payments, but at the end of the agreed mortgage                   Key Facts          This sets out details of the mortgage product that a
                    term you still owe the entire amount borrowed                             Illustration       customer is interested in. All mortgage sellers are
                                                                                              (KFI)              required to set out the details in a Key Facts Illustration
 Interest rate      Tells you how much interest you are charged on your                                          in the same format, so it’s easier for you to compare
                    mortgage loan, expressed as a percentage                                                     different mortgage deals
 Insurance          Compensation for specified loss, damage, illness or death,
                                                                                              Land               Fees paid to the Land Registry, for instance when
                    in return for a premium
                                                                                              registration       ownership of land is transferred
 Investment         Putting money or capital into something, with the hope                    fees
                    that you will get a profit out of it at a later date; for instance
                                                                                              Land Registry      A Government department that records registered land in
                    you invest in property so that when you sell your home
                                                                                                                 the UK (or ownership), along with details of that land such
                    you hopefully get more than what you bought it for. But
                                                                                                                 as mortgages or sales
                    remember, house prices can move up or down so this
                    might not necessarily be the case                                         Lease              A contract that conveys land from one person to
 Joint agency       Where two estate agencies market a home and share the                                        another for a specified period (e.g. 99 years), usually
                    commission regardless of which actually finds the buyer                                       in return for rent




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                 Appendix a – Glossary                                                                                                                       L-M

 Leasehold          Means you own a property (possess it), for an agreed                      Loan to Value      The amount of money you have borrowed/want to borrow
                    number of years, (as set out in the lease) but once the lease             (LTV)              expressed as a percentage of your property value. For
                    expires or finishes, the property belongs to the freeholder;                                  example, if you borrow £90,000 on a property worth
                    leases can be extended but this often means an increase                                      £100,000, your loan to value will be 90%
                    in charges
                                                                                              Local              When solicitors carry out searches with the local authority
 Leaseholder        A person who has possession of a leasehold property;                      Authority          to check for any likely rights of way, or changes or
                    a tenant under a lease                                                    Search             developments etc are due in the area that might affect the
 Lender             The mortgage company or financial institution (such as                                        property you are buying
                    a Building Society) that loans you the money i.e. gives you
                    a mortgage                                                                Mortgage           Simply, it means a loan. It’s an agreement to borrow money
                                                                                                                 in order to buy a property, with the property belonging
 Lending            See Agreement in Principle
                                                                                                                 to the lender until all the money has been repaid by the
 decision
                                                                                                                 borrower. Once the money is fully repaid, the property then
 Length of term The time period over which you choose to take out your                                           belongs to the borrower
                mortgage loan
                                                                                              Mortgage           A person who gives advice and recommendations on
 Liabilities        These are the debts you owe to creditors, which may                       Adviser            mortgages (usually from their own companies). Always
                    include your mortgage, car loan, credit card debt, etc.                                      make sure they are FSA registered
 Life assurance Also called life insurance, it is a type of insurance that                    Mortgage           This insurance can cover your mortgage payments if you
                can give cash to your next of kin, if you die or become                       Payment            can’t work because you’ve become unemployed, or can’t
                terminally ill                                                                Protection         work because of an accident or illness. But this type of
 Lifetime           A way for older homeowners to release value from their                    Insurance          insurance has many exclusions, so make sure you check for
 mortgage           property as a lump sum or as a regular income                             (MPPI)             instance how long it will cover your payments for




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                 Appendix a – Glossary                                                                                                                       M-P

 Mortgage term The agreed length of time for your mortgage, within which                      Offset             A type of mortgage that allows you to save on the interest
               you have to pay back all the borrowed money and interest                       mortgage           you will pay on your mortgage debt by ‘offsetting’ any
                                                                                                                 savings you (or perhaps family/friends) have linked to
 Multiple           Where several estate agencies market a home and only the                                     your mortgage. For example if you have a mortgage of
 agency             one that sells it gets paid the commission                                                   £120,000 and put savings of £20,000 with your lender,
 Negative           This is usually when house prices fall and the value of the                                  in this type of mortgage you would only pay interest on
 equity             property is less than the amount you owe as mortgage                                         £100,000
 New Buy            Where you buy a share of a newly built property and pay
 Direct             rent on the remainder                                                     Overall cost   See Annual Percentage Rate (APR)
                                                                                              for comparison
 NHBC               The National House-Building Council is the standard setting
 Guarantee          body and leading warranty provider for new homes in the                   Overpayments When you pay more than the minimum (or agreed)
                    UK. They provide new home buyers with a 10 year warranty                               monthly payment. This builds up as a reserve and
                    and insurance policy, paid for by the builder                                          depending on your mortgage and lender, can allow
                                                                                                           you to save money on interest, pay off your mortgage
 Notice of          Legal notice given by the mortgage lender detailing a                                  earlier, make an underpayment in the future or even take
 default            payment default (missed payments) by the borrower. This                                a payment holiday (see Payment holiday)
                    notice will also contain details of the steps the borrower
                    must take to pay this off and by what date, otherwise the                 Part and part      Where you chose to split your loan so that you repay part
                    property may be taken over by the lender (see Claim for                   mortgage           of it on an interest-only basis and part of it on a repayment
                    possession)                                                                                  (capital and interest) basis each month
 Noting an          Where you let the seller’s Solicitor or estate agent know you
 interest           are interested in buying a property. If two or more people                Part-exchange See house swapping
                    ‘note an interest’ a closing date is fixed and sealed ‘offers’
                    are made by all those interested                                          Payment break See payment holiday




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                 Appendix a – Glossary                                                                                                                         P-R

 Payment            Available with some mortgages, this is an agreed period                   Purchase price The amount or cost of the property you are buying or
 holiday            of time when you don’t have to make any mortgage                                         purchasing – it may differ from the initial asking price if you
                    repayments; for instance because of a previous                                           have negotiated!
                    overpayment
                                                                                              Redemption         See exit fees
 Planning           Written permission from a local authority permitting                      charges
 permissions        development of a house, extension or certain renovations
                                                                                              Redemption         Is issued by an existing lender to show exactly the total
 Portable           A feature of a mortgage which means it can be transferred
                                                                                              quote              amount needed to pay off your current mortgage
                    from one property to another
 Predicted          This is the energy certificate used by property developers                 Redundancy         A situation in which someone must leave their job because
 Energy             of new build homes before they are complete                                                  they are no longer needed
 Assessment
                                                                                              Release of         When a lender moves the funds required when purchasing
 (PEA)
                                                                                              funds              a house. There is usually a charge for the electronic transfer
 Product fee        A fee charged on some mortgages to secure a particular                                       of this money
                    mortgage deal. Also known as a reservation fee
                                                                                              Remortgage         When you move your mortgage to another lender (adding
 Property           The sale of a property by auction, where it goes to the                                      to or replacing your existing mortgage) without moving
 auction            highest bidder; in some cases the property is not sold if the                                home. Usually people remortgage to save money by taking
                    minimum selling price has not been reached. Auctions can                                     a better deal with another lender, and sometimes also to
                    be in person, by phone or online                                                             get cash for (e.g.) an extension, car or other purchase
 Property           Contains information on things such as parking, council tax
 Information        bands, property access and utility suppliers                              Rent to Buy        Allows you to rent with a view to buying at a future time
 Questionnaire                                                                                                   at an agreed price, protecting you if property prices rise
 (PIQ)                                                                                                           drastically




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                 Appendix a – Glossary                                                                                                                         R-S

 Rent-a-room        The government currently allow homeowners to earn                         Secured/           A guarantee of a payment on your mortgage. If you fall
 scheme             a certain amount of money a year, which is tax free, by                   Security           behind with payments or cannot repay your loan your
                    renting out a room in their home                                                             lender has security of your home and can sell it to get its
                                                                                                                 money back
 Repayment          Each month you pay off part of the ‘capital’ (amount
 mortgage           borrowed) as well as interest. This usually means that                    Seller             (Also called vendor) The present owner of the property
                    everything, capital and interest, will have been fully paid off                              who wants to sell it
                    by the end of the agreed term of the mortgage
                                                                                              Shared Equity      A form of affordable housing to help people (e.g. first time
 Repayment          The period of time over which you choose to repay your                                       buyers) get on the property ladder. It is similar to shared
 term               repayment mortgage (capital and interest)                                                    ownership, but generally, with shared equity you purchase
 Repossessed        A property is ‘taken back’ by the lender if the borrower fails                               all of a property, with an equity share loan making up the
                    to make the repayments. The properties are then sold so                                      difference between the mortgage and purchase price. The
                    the lender can get their money back; usually a last resort                                   equity loan is always paid back as a percentage of what
                    for the lender – always let them know as soon as possible                                    your home is worth, which means the amount you owe will
                    if you are struggling with repayments                                                        rise and fall with the value of your home

 Sale statement Contains basic information about the property such as                         Shared             Similar to shared equity, but with shared ownership you
                the full address, if it is a house or flat, whether it is                      ownership          own a ‘share’ in a property with another party – usually
                freehold or leasehold, registered or unregistered land                                           a Housing Association and you pay rent to them for their
                and sellers details                                                                              share of the property

 Searches           An investigation or ‘search’ of the local area to see if there            Show homes         Newly built houses that are decorated and furnished for
                    are proposed plans or problems in the area that you should                                   prospective buyers to view
                    be aware of. Some searches are required, while others will
                    depend on the property type and location




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                 Appendix a – Glossary                                                                                                                           S-S

 Single Survey      This is required in Scotland and contains an assessment by                Standard           This is a variable rate that is set by the lender, and is
                    a surveyor of the condition of the home, a valuation and an               Variable Rate      usually the rate you move onto at the end of your special
                    accessibility audit for people with particular needs                      (SVR)              deal period
 Sole agency        Where an estate agent has exclusive right to market a                     Structural         A comprehensive, survey of all parts of the property
                    home but no commission is due if you find your own buyer                   Survey             detailing faults (major and minor), estimated costs to repair
                                                                                                                 and if any further reports are needed; does not give you the
 Sole selling       Where an estate agent has exclusive right to market a                                        value of the property
                    home and the commission will still be due even if you find
                    a buyer yourself                                                          Subject to         The agreement to go ahead with the purchase or sale of
 Special deal       The time period during which the ‘deal’ you have selected                 Contract           the property depending on the final contracts being signed
 period             applies (i.e. usually a fixed or tracker rate), before you move                               by the seller and the buyer; at this stage either side can still
                    onto the lender’s Standard Variable Rate (SVR). Most lenders                                 ‘pull out’ of the deal
                    offer a choice of deal periods, e.g. 2, 3, 4 or 5 years etc               Sustainability     Living in a way that minimises the cost to the environment
 Staircasing        A process used in shared ownership home buy schemes                       Survey             An inspection of the property by a qualified surveyor
                    that allow you to increase your ‘share’ in a property as your                                carried out before buying a property (for example a Home
                    financial situation improves, eventually to 100% of the                                       Buyers Report or Structural Survey also known as
                    property                                                                                     ‘building survey’. See also Surveyor and Valuation)
 Stamp Duty         The one-off tax you would need to pay the Government for
 Land Tax           your property if it’s over a certain value. Currently the rate            Surveyor           The professional who carries out the valuation or survey of
                    is 1% on properties over £125,001 but less than £250,000,                                    a property by checking the house for faults, etc; qualified
                    3% on properties between £250,001 and £500,000 and                                           by the Royal Institute of Chartered Surveyors (RICS)
                    4 to 5% on properties over £500,001. First time home                      Surveyor’s         A report by a qualified surveyor detailing the results of a
                    buyers do not pay Stamp Duty if their property value is less              Report             property inspection
                    than £250,000



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                 Appendix a – Glossary                                                                                                                         T-V

 Tenants in         When you jointly own the property, but you own a share                    Utilities          The public services we need everyday such as water, gas
 common             of the value, which you can give away or sell, or leave to                                   and electricity
                    someone else if you die
                                                                                              Valuation          The inspection that checks the value of a house to see
 Title Deeds        The documents held at the Land Registry that prove legal                                     how much it is worth, for instance to see if it is worth the
                    ownership of a property and all other dealings with that                                     asking price, usually conducted by a surveyor. Also used by
                    land; England and Wales, Scotland and Northern Ireland all                                   lenders to decide how much money they are willing to lend
                    have their own Land Registries                                                               you (also called land valuation or real estate appraisal)
 Tracker            A tracker mortgage is a variable mortgage that tracks                     Valuation fee      (Also called valuation cost) The charge for a report detailing
 mortgage           (is linked to) the Bank of England’s Base Rate by a set
                                                                                                                 the value of a property. Usually the fee increases with the
                    percentage. This means that your payments move up and
                                                                                                                 value of the property
                    down in line with any changes to the Bank of England
                    Base Rate                                                                 Valuer             The person who checks the property and values it by
 Transfer deed      A legal document transferring ownership of land, for                                         comparing similar properties at that time in the area and
                    instance from the seller to the buyer                                                        also by checking the property for faults, etc, usually done
                                                                                                                 by a qualified surveyor (see Surveyor)
 Under-             When you pay less than the agreed or minimum mortgage
 payments           payment. Usually only allowed once you have built up a                    Variable Rate      A type of mortgage where payments can move up or down
                    reserve through overpayments                                              mortgage           dependant on the movement of the interest rates of the
                                                                                                                 mortgage lender
 Unsecured          An amount of money borrowed without any property or
 debt               goods used as security against it                                         Vendor             Another word for the person selling the property




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                 Appendix b – Useful contacts

There are many things to think about when buying, selling or remortgaging your home and you may not have all the
answers! We have compiled this list of useful places you can go to for questions and advice.
Nationwide                                                   Mortgage Advice
                                                                                                                          www.financial-ombudsman.org.uk

   www.nationwide.co.uk                                          www.which.co.uk/lendersrated                          For money advice
                                                             Online Citizens Advice Bureau service
   www.nationwideeducation.co.uk                                                                                          www.moneyadviceservice.org.uk/yourmoney

                                                                 www.adviceguide.org.uk/
   www.nationwide.co.uk/money_worries                                                                                     www.moneyadvicescotland.org.uk
                                                             Find your local Citizens Advice Bureau
                                                                                                                       For general leaflets
   www.nationwide.co.uk/hpi/                                     www.citizensadvice.org.uk
                                                                                                                          www.bba.org.uk

   www.nationwide.co.uk/mortgages/calculators                    www.citizensadvice.co.uk
   cost-of-moving-home-calculator.htm                                                                                     www.bsa.org.uk

                                                                 www.cas.org.uk
                                                                                                                          Association of Independent Financial Advisers
   www.nationwide.co.uk/mortgages/
                                                             For mortgage advice                                          www.aifa.net
   calculatorsmortgagerepayments.htm

                                                                 www.moneysavingexpert.com/                               www.a-m-i.org.uk
   www.nationwide.co.uk/mortgages/                               mortgages
   calculatorshowmuchborrowafford.htm

Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                      APPENDIX B: page 1 of 4
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                 Appendix b – Useful contacts

Solicitors & Conveyancers                                    Buying or Selling a Home                                  Property Search Websites
To find a solicitor in England and Wales                      For information on mortgages
                                                                                                                         www.rightmove.co.uk
   www.lawsociety.org.uk                                         www.cml.org.uk/cml/consumers

To find a solicitor in Northern Ireland                       For details of Energy Performance Certificates               www.primelocation.com


   www.lawsoc-ni.org                                             www.epcregister.com                                     www.findaproperty.com

To find a solicitor in Scotland                               For details about Home Reports (Scotland)
                                                                                                                         www.zoopla.co.uk
   www.lawscot.org.uk                                            www.homereportscotland.co.uk

To find a licensed Conveyancer                                For details about Stamp Duty                                www.tepilo.com


                                                                 www.hmrc.gov.uk/sdlt                                    www.globrix.com
   www.conveyancer.org.uk
                                                             Estate Agents                                               www.home.co.uk
   www.theconveyancingassociation.co.uk
                                                                 www.naea.co.uk
                                                                                                                         www.upmystreet.com

                                                                 www.guildproperty.co.uk



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                 Appendix b – Useful contacts

Surveyors                                                    House Prices
                                                                                                                       www.traveline.info

                                                                 www.landreg.gov.uk/house-prices
   www.ricsfirms.com                                                                                                    www.Police.uk
   www.surveyline.com
                                                                 www.ros.gov.uk/                                       www.nhs.uk/servicedirectories
   www.surveyorsweb.co.uk
                                                                 www.nationwide.co.uk/hpi/                             www.environment-agency.gov.uk/
Land Registry                                                                                                          homeandleisure/37793.aspx
                                                                 www.rics.org/housingmarketsurvey
   www.landreg.gov.uk                                                                                                  www.ofsted.gov.uk
                                                             Research Locations
   www.eservices.ros.gov.uk                                                                                            www.sitefinder.ofcom.org.uk
                                                                 www.neighbourhood.statistics.gov.uk
   www.irelandlandregistry.co.uk                                                                                       www.uk-air.defra.gov.uk
                                                                 for England and Wales
                                                                 www.voa.gov.uk
                                                                                                                       www.highways.gov.uk/roads
                                                                 for Scotland
                                                                 www.saa.gov.uk




Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                   APPENDIX B: page 3 of 4
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                 Appendix b – Useful contacts

Credit Reference Agencies                                    Insurance                                                 Debt Help
                                                             Find an insurance broker                                  Free impartial debt advice
   www.callcreditcheck.co.uk
                                                                                                                          www.nationaldebtline.co.uk
   www.equifax.co.uk                                             www.biba.org.uk

                                                             For an insurance broker who is an IIB member                 www.cccs.co.uk
   www.experian.co.uk
                                                                 www.iib-uk.com                                           www.payplan.com
Removals                                                     For factsheets and information on insurance
                                                                                                                          www.debtadvicefoundation.org
   www.bar.co.uk                                                 www.abi.org.uk
                                                                                                                          www.adviceguide.org.uk
                                                                                                                          www.citizensadvice.org.uk
   www.ngrs.co.uk
                                                                                                                       For housing debt advice

                                                                                                                          www.shelter.org.uk


                                                                                                                          www.housing-debt-helpline-wales.org




Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                    APPENDIX B: page 4 of 4
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                 Appendix c – Ten point action plan for home buyers

1. Things to consider before I buy                            5. How much can I borrow?                                8. Making an offer
   Buy and sell at the same time, sell first                      What will a lender allow me to borrow?                a. Making an offer in England, Wales and Northern
   or buy first?                                                  Check my credit rating                                   Ireland
   Will I be buying with someone else?                           What deposit will I have?                                Energy Performance Certificate (EPC)
   Financial considerations                                      Remember the extra costs (estate agents,                 Initial deposit
                                                                 solicitors, valuation fees, searches, surveys,           Solicitors and fees.
2. Understand the low cost ownership                             stamp duty, land registry, mortgage arrangement
   options                                                                                                             b. Making an offer in Scotland
                                                                 fees, removal costs).                                    Role of a solicitor
   Shared ownership
   Shared equity                                              6. The application process                                  Home Report
   Rent to buy                                                   Get a Key Facts Illustration (KFI)                       Surveys
   Repossessions or auctions.                                    Get an Agreement in Principle (in person, by             Putting in an offer on a property
                                                                 phone or on-line)                                        Initial deposit
3. Mortgage reminders                                            The main application and what they will need
   How to pay (interest only/capital repayment)
                                                                                                                          Final preparations
                                                                 (personal, employment and financial details,
   Types of mortgages (fixed, variable, tracker,                  credit rating, and purchase requirements).            9. Surveys and Insurances
   capped, collared, cashback, offset, current                   How to make the process go smoothly (prepare,            Surveys (Home Buyers Report/Structural Survey)
   account.)                                                     be thorough, ask)                                        Home Insurances (Buildings, Contents)
   What about special features?                                                                                           Personal Insurances (Critical Illness, Life, Income
                                                              7. Finding a property
   Where to go to get a mortgage deal (building                                                                           Protection, Mortgage Payment Protection).
                                                                 Research the locations you like
   societies, banks, insurance companies, brokers,
   house builders, specialised mortgage companies,               Where to look for a property (estate agents,          10. Exchanging Contracts
   finance houses)                                                internet, local papers, ‘For Sale’ boards, house          and Completion Day
                                                                 builders, auctions)                                       Final preparations (Land Registry, transfer deeds,
   Check out online comparison tools
                                                                 Freehold vs. leasehold properties                         money transfer, final accounts)
   Consider speaking to my current lender
                                                                 Complete a ‘Finding a Property’ checklist                 Completion Day (transfer payments, legal
4. How much can I afford?                                        Fill in a ‘Viewing Checklist’ for each property and       documents, getting the keys).
   Work out your budget (income in and costs out)                ask questions                                         And then get ready to MOVE INTO YOUR NEW HOME!
   Interest rates and monthly payments                                                                                 See Appendix d) Ten point plan for moving in
   How long do I want my mortgage over?

Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                     APPENDIX C: page 1 of 1
                                                                                                                                                         Home Guides




                 Appendix d – Ten point action plan for moving in

1. Plan and confirm your moving date                           6. Visit the current owners and your new                 9. Make a moving box of essentials for
   With solicitors and sellers                                   home to make sure:                                       the day
   Book the day off work                                         Where water stopcocks, fuse boxes, and gas               Kettle, mugs, tea, coffee, milk, sugar
                                                                 electricity meters are                                   Cleaning things: cloths, detergents, dustpan and
2. Leaving your current home                                     Final meter readings done or booked                      brushes, vacuum cleaner and dustbin bags
   If buying and selling on the same day:
   double check with your home’s new owners                      All window, garage, shed, internal, front and            Toilet paper, kitchen towels and tissues
   timings and final handover arrangements.                       back door keys plus spares are all left labelled         Torch, light bulbs, fuses, tools
                                                                 and in one place                                         Pens, paper, Post-It notes
   If you are renting: give as much notice as
   possible to your landlord (to avoid double paying             Manuals, leaflets etc for boiler or any appliances
   rent and mortgage)                                            left                                                  10. Moving day
                                                                 Plan which rooms you want to put your things              Check all services are connected (water, gas,
3. Contact utilities and services                                into                                                      electricity, phone, internet)
   For existing address to read meters and send the              Apply for a parking permit if appropriate                 Check insurance cover
   final bill                                                                                                               Unpack methodically room by room (kitchen,
   With new address and date to start or take over            7. Pack everything and label boxes                           bedroom, then the rest)
   service provision (take your own readings)                    Mark each with the room it needs to go into               Make sure valuables and important documents
   Post Office to redirect mail                                   Label all contents carefully                              are put somewhere safe.
                                                                 Pack valuables and store somewhere safe
4. Get quotes from moving company/van
   hire                                                          Keep cash, credit cards cheque book at hand
   Get at least three different quotes                                                                                 ENJOY YOUR MOVE!
                                                              8. Settle all bills and let others know you
   You could also ask friends to help                            are moving
                                                                 Newspaper, milk etc.
5. Donate or recycle unwanted items and
   pack non-urgent items                                         Your bank, building society, insurance companies,
   Give to charity shops                                         credit card companies, Inland Revenue, DVLC,
                                                                 Council Tax office, DSS office, Electoral Roll,
   Sell on eBay or locally                                       Doctor, Dentist, your employer, etc.
   Recycle wherever possible, use Freecycle!                     Send out e-mails or cards to let all you friends
   Pack things you won’t need before the move                    and family have your new address too!


Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk                    APPENDIX D: page 1 of 1
                                                                                                                                              Home Guides




                  Appendix e – Home buyers’ contact details

There can be many different people involved in the buying process. Use this chart to keep track of everyone involved so
you have all contact details in one place!
Contact            Address                               Telephone and Fax No.                   Name and Email Address   Notes
 Bank or Build-                                                                                   N
 ing Society                                                                                     @

 Estate                                                                                           N
 Agent                                                                                           @

 Insurance                                                                                        N
 Company 1                                                                                       @

 Insurance                                                                                        N
 Company 2                                                                                       @

 Mortgage                                                                                         N
 Provider                                                                                        @

 Removal Firm                                                                                     N
 or Van Hire                                                                                     @

 Solicitor                                                                                        N
                                                                                                 @

 Other                                                                                            N
                                                                                                 @


If you are also selling your current home at this time you may want to check out our Selling Guide.

Provided by Nationwide - independent of Nationwide products and services. Available on www.NationwideEducation.co.uk          APPENDIX E: page 1 of 1
                                                                                                                                       Home Guides




                 Appendix f – Home buyers’ checklist (for those you need to contact)

There are many people you should let know that you are moving! Keep track of everyone here once you have let them
know that you have moved and what your new address is.
Contact             Address                                      Telephone and Fax No.                    Notes                   Date confirmed
Bank or Building
Society                                                          @

Council Tax
Office                                                            @

Credit Card 1
                                                                 @

Credit Card 2
                                                                 @

Credit Card 3
                                                                 @

Credit Card 4
                                                                 @

Dentist
                                                                 @

Doctor
                                                                 @




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                                                                                                                                       Home Guides




                 Appendix f – Home buyers’ checklist (for those you need to contact)

Contact         Address                                       Telephone and Fax No.                    Notes                      Date confirmed
DVLA
                                                              @
Employer
                                                              @
Family 1
                                                              @
Family 2
                                                              @
Family 3
                                                              @
Family 4
                                                              @
Friends 1
                                                              @
Friends 2
                                                              @
Friends 3
                                                              @
Friends 4
                                                              @
Hire Purchase
1                                                             @



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                                                                                                                                       Home Guides




                 Appendix f – Home buyers’ checklist (for those you need to contact)

Contact         Address                                       Telephone and Fax No.                    Notes                      Date confirmed
Hire Purchase
2                                                             @
Inland
Revenue                                                       @
Insurance
Company                                                       @
Buildings
Insurance                                                     @
Car Insurance
                                                              @
Contents
Insurance                                                     @
Life Insur-
ance                                                          @
Mortgage
Payment                                                       @
Health
Insurance                                                     @
Internet
Provider                                                      @
Library
                                                              @



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                                                                                                                                       Home Guides




                 Appendix f – Home buyers’ checklist (for those you need to contact)

Contact         Address                                       Telephone and Fax No.                    Notes                      Date confirmed
Optician
                                                              @
Post Office
                                                              @
School
                                                              @
Sports Club
                                                              @
Store Card 1
                                                              @
Store Card 2
                                                              @
Store Card 3
                                                              @
Store Card 4
                                                              @
Telephone
Provider                                                      @
University
                                                              @
Utilities
                                                              @



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                                                                                                                                       Home Guides




                 Appendix f – Home buyers’ checklist (for those you need to contact)

Contact         Address                                       Telephone and Fax No.                    Notes                      Date confirmed
Electric
                                                              @
Gas
                                                              @
Water
                                                              @
Vet
                                                              @
TV Licence
                                                              @


                                                              @


                                                              @


                                                              @


                                                              @


                                                              @


                                                              @



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                                                                                                                                               Home Guides




                 Appendix g – List of things to ask an adviser

The following is a list of suggested things you should ask an adviser:
   What are their rates and any other associated costs, such as reservation fee, product fee and broker fee (if applicable)?
   Can associated costs be included in the mortgage loan or are they payable upfront?
   What does the lender charge for survey / valuations?
   What is the lenders revert rate once the initial deal term is finished and how will this affect monthly payments?
   Are there any charges for early repayment of the mortgage?
   Is there an arrangement fee to pay and if so will I get this back if my application does not proceed?
   Is the mortgage portable to another property if I decide to move?
   Am I allowed to make partial repayments of capital or increase my monthly repayments if I wish to repay the mortgage early?
   Are there any other conditions attached to the mortgage? Will I have to buy insurance from that lender?
   (To ask a Broker) Do you provide advice on mortgage products from the whole market or just a selection of lenders?




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